Top scorer Craig Mackail-Smith came off the bench to cap a fine comeback with a late winner in Tuesday night's League One clash at London Road.
The striker, sent on at the start of the second half, pounced for his 22nd goal of the season four minutes from time after Scunthorpe goalkeeper Joe Murphy had kept out a shot from Charlie Lee following a delivery from another half-time arrival, Tom Williams.
Posh had been outclassed by slick Scunthorpe in the opening period and were fortunate to only be one goal down, when on-loan Arsenal man Henri Lansbury swept home after a cutback from Gary Hooper.
But it was a different game after the break as Posh made changes and upped the ante, with Chris Whelpdale levelling with his sixth goal of the season in the 63rd minute.
A second Scunthorpe 'goal' from Paul Hayes was wiped out for offside before Mackail-Smith made no mistake when presented with the chance to settle the issue late on.