Youngster John McAliskey's incredible late double capped an impressive fightback as nine-man Town moved closer to automatic promotion.
Academy product McAliskey, making his full league debut, scored with two powerful headers in the last three minutes to secure an unlikely win that leaves Huddersfield on the brink of an immediate return to the second division.
McAliskey was left unmarked to send a looping header over keeper Tom Evans on 87 minutes to drag Town level at 2-2.
And McAliskey won it in injury time when he peeled away from his marker Cliff Byrne to head in Danny Schofield's right wing cross.
The goal caused mayhem as Huddersfield's jubilant players celebrated with the ecstatic fans and it left referee Lee Probert with no choice but to book McAliskey and Schofield for orchestrating the celebrations.
It was Schofield's second yellow card of the match and he joined skipper Efetobore Sodje for an early bath.
Sodje was dismissed in the first half for separate clashes with Scunthorpe's Steve Torpey and Terry Barwick.
And to make matters worse, Huddersfield's assistant manager Terry Yorath was given a straight red by Mr Probert in the tunnel at half time for allegedly using foul language as he disputed the referee's decision to award Scunthorpe a penalty on 41 minutes.
The spot kick was given for Sodje's tussle with Torpey in the box only for keeper Paul Rachubka to pull off a brilliant save to keep out Steven MacLean's penalty.
But on loan Glasgow Rangers striker MacLean, who is the third divison's top scorer, held his nerve to net the rebound to register his 25th strike of the season.
Sodje was yellow carded for the incident involving Torpey and on 67 minutes was sent packing for a high challenge on Barwick.
Huddersfield had taken an early lead when Evans fumbled Schofield's free kick to allow David Mirfin to score from close range.
But minutes later, the Iron were level when the hapless Sodje, who ironically collected the player of the month award before kick off, headed into his own net a Kevin Sharp corner.
And once the visitors were ahead, it seemed as if Huddersfield's promotion hopes were going to take a massive blow.
They never really looked like getting back into the game until McAliskey's late intervention and it leaves Scunthorpe without a win in nine matches as they desperately fight a relegation battle.
*What this means for the relegation battle
Despite the defeat at Huddersfield Scunthorpe are no closer to the relegation zone in terms of points.
Bottom club Carlisle lost 2-0 at home to Lincoln, while York also failed to pick up any points at home to Cheltenham.
York need three points to catch United, but with our superior goal difference they effectively need to pick up four points more than us. Scunthorpe have three games left while York have four.
Darlington's win today moves them above Scunthorpe, while Rochdale pull level on 46 points.