They eased into a three-goal lead at half-time against the relegation-threatened Bournemouth, who are still without an away win this season.
But the visitors fought back strongly in the second half after a triple substitution to leave Scunthorpe hanging on at the end.
It was skipper Andy Crosby who got the home side off to a great start forcing a shot home at the second attempt from close range to give them an eighth minute lead.
James Hayter had a chance to reduce the arrears when he wriggled free into the box for the visitors but he steered his shot wide of the target.
It was Scunthorpe who made 2-0 in the 29th minute when Ian Morris sent Andy Keogh racing into the box to beat goalkeeper Neil Moss with a clinical finish.
The home side struck again in the 44th minute when leading marksman Billy Sharp netted his 19th goal of the season, turning to fire home from close range.
Bournemouth manager Kevin Bond reacted with a triple substitution at half-time and got an immediate response.
Just 90 seconds into the second half it was one of those substitutes, Sam Vokes, who got the visitors on the scoresheet after a real gaffe from Scunthorpe keeper Joe Murphy handed him the opening.
Vokes went close again with a header that drifted just wide of the far post as Bournemouth grew in confidence.
Scunthorpe nearly restored their three-goal advantage when Keogh had a shot blocked on the line by centre-back Neil Young.
But it was Bournemouth who brought themselves right back into the game in the 74th minute when Vokes snatched his second goal of the game with a cool left-footed finish after a cross from former England man Darren Anderton had been nodded down at the far post by Brett Pitman.
It set-up a nervous finish for Scunthorpe, for whom Keogh and Sharp both might have done better with good chances in the closing stages.
It was disappointment for Bournemouth who still can't get things right on their travels, while Scunthorpe strengthened their promotion push with a result which sees them start the new year top of the table.