John Marquis grabbed the first double of his professional career with a goal in either half to move Millwall up to seventh in the table and keep the pressure on sixth-placed Nottingham Forest.
Teenager John, 18, bagged his first from close range on 37 minutes and then thumped home a fine second goal five minutes into the second-half.
Iron sub Michael O'Connor hit an 88th-minute penalty to set up a nervy finale, but victory was thoroughly deserved by the Londoners.
On an afternoon of twists and turns in which The Lions temporarily moved into the top six before slipping out with Forest's 3-2 win at Bristol City, Leeds United's defeat at Crystal Palace coupled with Burnley dropping points at home to Portsmouth leaves Kenny Jackett's men primed and ready to pounce in the event of Forest slipping up with just two games to go.
It is still a huge ask of Jackett's young side, but the manner in which his team dug in again to grind out victory was testament to the spirit and belief in the Lions camp.
"This was a tough game, the standard of the pitch was poor and it is a tight ground but we talked beforehand about producing a winning performance and that's exactly what we did," said assistant boss Joe Gallen, who took over media duties afterwards as boss Kenny had lost his voice.
"I thought we did really well and we will be looking for a packed house at The Den on Saturday for the visit of Swansea City."
Facing their second match in less than 48 hours, Monday's encounter at struggling Scunthorpe was always likely to be a battle, and that indeed proved to be the case.
With so much at stake an epic encounter was never likely with a bumpy playing surface proving a hindrance on a number of occasions to the teams.
Unsurprisingly it was the hosts who came flying out of the traps and created the first real noteworthy chance when Marcus Williams evaded the attention of Tamika Mkandawire, burst into the box and whipped in a fierce anngled drive that David Forde did well to block at his near post.
The Lions tested Iron's defensive resolve on 18 minutes when great work by Marquis set up strike partner Josh McQuoid. Unfortunately McQuoid's first touch took the ball a tad too far to make a clean contact, his shot ricocheting straight into keeper Joe Murphy's hands.
Andros Townsend, who sparkled in the first half particularly, hit a crisp drive that Murphy held whilst referee Jon Moss and his assistants somehow came to the conclusion that Jimmy Abdou being poleaxed did not constitute a free-kick.
Jack Smith, back in for the injured Alan Dunne, produced a delightful piece of skill on the byline to set up James Henry, with the latter's stinging drive blocked for a corner as Millwall prised and probed for the opening goal.
And seven minutes before the break the goal duly arrived. Mkandawire twice had efforts blocked and as the ball ping-ponged around the penalty area Marquis found the space and control to eventually thump home from close range.
Marquis doubled The Lions' tally five minutes after the restart with another clinical finish, crashing home a first-time shot after Henry's hooked cross had been headed straight into his path by a poor defensive clearance.
The young striker was a whisker away from adding his - and Millwall's - third goal, only to send a 52nd-minute glancing header narrowly wide from another Henry delivery.
Scunthorpe responded by making a double substitution in a bid to claw their way back and at the same time keep their slim survival hopes alive.
Despite piling forward, The Lions' rearguard were resolute and restricted their hosts to trying their luck from long-range, which Bobby Grant in particular did - firing high and wide on five occasions.
A supremely timed tackle by Darren Ward denied Chris Dagnall as he prepared to pull the trigger and Ramon Nunez's fizzer was deflected for a corner as Scunny pushed on.
The home side were handed a lifeline three minutes from time when an almighty scramble ended with Joe Garner on the deck. After a comical argument between three Scunny players, sub O'Connor refused to let go of the ball and promptly vindicated his stubborness by cracking home the resultant spot-kick.
Lions boss Jackett brought on Darren Purse for Townsend as injury-time approached, and the expected aerial bombardment materialised as Scunny desperately launched the ball forward.
But with three crucial points at stake, there was to be no slipping up by these resilient Lions to set up a humdinger at home to Swansea City this Saturday.
Scunthorpe United: Murphy, Togwell, Nunez, Dagnall, Nelson, Mirfin, Collins, Williams, Nolan (O'Connor, 61mins), Duffy (Grant, 61mins), Garner. Subs not used: Gordon, Raynes, Miller, Lillis, Reid.
Scorer: O'Connor (88mins, pen)
Millwall: Forde, Smith, Craig, Abdou , Robinson, Ward, Townsend (Purse, 90+1min), Mkandawire, McQuoid (Bouazza, 75mins), Marquis (Schofield, 75mins), Henry. Subs not used: Mildenhall, Eastmond, Hackett, Barron.
Scorer: Marquis (37, 50mins)
Ref: J. Moss
Att: 5,190 (away 335)