It was awarded in the 88th minute when the linesman saw some off-the-ball shirt-pulling in a crowded box.
It was defender Gregory Vignal who then stepped up to save the Saints a point with a well-struck spot-kick.
Until then Scunthorpe had looked set for only their third win in 22 games. They dominated most of the first half and might have had an early lead when Matthew Sparrow squandered a good chance.
Leading marksman Martin Paterson then forced a good full-length save from goalkeeper Kelvin Davis.
Scunthorpe did finally go in front in the 41st minute when skipper Andy Crosby celebrated his 700th first-team game by forcing home the rebound after his own spot-kick had been blocked by Davis.
Southampton had been anonymous as an attacking force throughout the first half but gained the edge in the 54th minute when Scunthorpe were reduced to ten men when Sparrow was red-carded for his challenge on full-back Wayne Thomas.
The Saints pushed forward in search of an equaliser as Scunthorpe were forced to defend in depth.
The home side looked to have held out until the award of that controversial late penalty which denied them victory.
And in stoppage time Southampton might have snatched all three points when substitute Bradley Wright-Phillips could only fire into the side-netting after taking the ball past goalkeeper Joe Murphy.