Treacy curled in a delicious winner to complete a remarkable turnaround at Deepdale that leaves Scunthorpe in dire relegation straits as the season reaches its climax.
The Iron had been on course for a vital win after two goals inside eight second-half minutes from Garry Thompson had cancelled out Jon Parkin’s first-half opener.
But Billy Jones nodded home with four minutes remaining to level and set up the grandstand finish, with Treacy’s strike sealing the win.
The defeat leaves the Iron two points above the drop zone with four left to play and in an incredibly tight table, their relegation fate looks as if it will go down to the wire.
Preston will be able to sit comfortably after registering their first win in six games and Darren Ferguson will be looking forward to planning for next season.
Scunthorpe knew that a win would go a long way to securing their safety and they were quickly into their stride, creating two early chances for striker Paul Hayes.
Firstly he was denied by Andy Lonergan after a defence-splitting pass from Gary Hooper and then he headed over Thompson’s cross.
The Iron could not capitalise on their strong start, though, and Preston came into the game, creating chances of their own.
Parkin bundled wide after latching on to a long ball from defence and Treacy could not connect properly with his volley after good work from Billy Jones.
But those misses did not prove costly as the hosts went ahead in the 28th minute and Scunthorpe were guilty of their own undoing with some shambolic defending.
Jones advanced into the box and put in a harmless looking cross, which Cliff Byrne could only manage to head against a team-mate and the ball fell perfectly for Parkin who pounced to convert from six yards.
Preston were then reliant on a flying save from Lonergan to keep them ahead when the 26-year-old keeper expertly tipped Grant McCann’s curling shot around the post as Scunthorpe looked for a way back into the game.
But it was Preston that continued to dominate and Scunthorpe keeper Joe Murphy made two fine saves to keep his side in it.
He got down low to deny Parkin after a neat one-two on the edge of the area and then in first-half injury time he superbly kept out Danny Mayor’s effort.
The second half began in an open fashion, with both sides having opportunities in front of goal.
Thompson had an effort cleared off the line by Sean St Ledger after burning off the attention of Elliott Ward, while Murphy again produced a good save to deny Treacy’s deflected effort.
Then in the 64th minute Scunthorpe were gifted a leveller after a glaring error from St Ledger.
The Republic of Ireland international casually played the ball back to Lonergan without looking and inadvertently played in Thompson, who finished with a low effort.
The leveller buoyed the visitors and they were ahead just six minutes later when Thompson was fed by McCann and he scored with a cute finish with the outside of his boot.
Preston had looked short of ideas in their search for an equaliser, but they eventually found a way through in the 86th minute when Jones nodded home a rebound after Murphy had parried Neil Mellor’s header.
That was not the end of the drama, though, as on-loan winger Treacy sealed an unlikely Preston win when he cut in from the right and curled into the corner.