Forest had actually dominated the first half hour, but once Cleveland Taylor put the visitors ahead, there was only one team in it, leaving former Forest defender Brian Laws delighted with his side.
Andy Keogh made it 2-0 on 36 minutes, Ian Morris all but ended the game as he made it 3-0 with 25 minutes still to play, before top scorer Billy Sharp rubbed salt in the wounds in injury time.
Nicky Southall was the first to try his luck, with a rising shot that was always clearing the bar, but it was the visitors who carved out the best early chance.
That came as Taylor floated in a teasing ball from the right, which Ian Baraclough headed firmly downwards, but saw Paul Smith make a smart save.
From that point, it was Forest who were generally just on top, as Jack Lester curled a shot just over, James Perch flicked a header just wide of the post and Ian Breckin failed to properly connect with a six-yard header from a well-flighted Southall free-kick.
And Grant Holt came agonisingly close to putting the home side ahead, as he latched on to Gary Holt's pass and charged into the box, before rifling in a rising shot which flew just wide of the top corner of the net.
But it was to be Scunthorpe who were to take control, as they stepped up a gear to take a grip on the match before half-time.
Unlike last weekend, when they went into the interval 1-0 behind to Swansea, Forest had actually been playing fairly well. But they were left with an even bigger mountain to climb, as Scunthorpe struck twice before the break to go in with a 2-0 advantage.
The first came after Breckin had blocked a Matt Sparrow run into the box on 28 minutes, with the loose ball running to Taylor and he stroked a confident finish home from ten yards.
The second was also the result of an emphatic finish, this time as Sharp provided the killer ball for strike partner Keogh, who lashed a firm shot into the bottom corner of the net from just inside the box.
It could have been worse for Forest, as a Morris cross from the left was allowed to fly all the way across goal to Sharp, on the far side of the six-yard box, where he lingered too long over his shot and was denied by a desperate challenge from Julian Bennett.
After the break Forest found chances harder to come by, as Scunthorpe defended well and repeatedly threatened on the break.
Southall did manage to force Joe Murphy into making his first save of the afternoon, but the angle was too tight for him to beat the keeper from 12 yards.
But it was always Scunthorpe who looked the more likely to add to the scoreline and it was no surprise when they did, as another flowing move culminated in a confident finish from Morris, as he latched on to Taylor's cutback, before slotting home.
Forest could not even claim it was unfair as Sharp broke clear to make it 4-0 deep into injury time and complete the home side's humiliation.