Blackpool rocked Town twice but Mick McCarthy’s side came out on top with Christophe Berra’s late header taking Blues back into the top six.
The Seasiders, relegated in midweek, stunned Town with a goal inside four minutes, Andrea Orlandi left free to put his side ahead from 12 yards.
Blues were in front before the half hour though, Freddie Sears scoring with a left foot volley, then from close range to take his tally to seven since arriving at Club three months ago.
The former West Ham striker could have claimed a hat-trick before Henry Cameron levelled the scores for the visitors.
Berra came up with the vital third goal for Town though seven minutes from time to lift Blues into the Play-Off places on goal difference.
Mick McCarthy made three changes to the side that went down at Huddersfield on Monday, Tyrone Mings returning to the line-up after suspension, with Sears and Teddy Bishop also back in the team.
The Portman Road crowd were silenced though after just four minutes, Cameron had a clear run down the left and his cross was passed effortlessly into the net by Orlandi.
Daryl Murphy responded for Blues and almost escaped the attention of Peter Clarke to get in on goal but the Blackpool skipper did well to time his tackle and clear the danger.
Bishop curled a left footer wide as Town looked to get back on equal terms, Seasiders’ ‘keeper Elliot Parish thwarting Sears as he broke into the box, then Luke Varney headed wide from Bishop’s corner.
Cole Skuse almost found Sears inside the Blackpool box, then Mings got free down the left but Varney and Sears couldn’t force the ball in, Sears then volleying over after his initial shot was blocked.
Varney’s game ended midway through the first-half, the striker forced off with a hamstring injury. Seconds later, on 24 minutes, Town were level, Tommy Smith’s free-kick headed down by Mings and Sears volleyed in superbly with his left foot.
Sears doubled his and Town’s tally four minutes later, Luke Chambers broke into the Blackpool box after a flowing move, the ball cannoned off a defender and Sears did the rest from close range.
Former Town loanee Darren O’Dea had to be replaced for the visitors before the break, Blues having a penalty appeal soon after when the ball appeared to hit Clarke’s hand but referee James Linington waved away claims, leaving Blues a goal up at the break.
Murphy could have extended that advantage a minute into the second-half, getting on the end of a ball over the top but firing wide.
Blues had an anxious moment at the other end when Christophe Berra’s headed back pass drifted past Bart Bialkowski but fortunately just wide of the far post.
Berra’s header was hacked off the line by David Ferguson, Parish then forced into a save to his left from Sears, the January signing from Colchester then going even closer to his hat-trick, the Blackpool ‘keeper denying him with his left hand.
Despite all the play going in one direction it was Blackpool who struck to level the scores just past the hour, Gary Madine crossing from the right and Cameron forcing the ball in.
Mings fired over after spinning away from his marker in the box before Jonny Williams entered the fray for the last 15 minutes, Jay Tabb making way.
Madine headed over for the visitors but with time running out, Murphy’s trickery created space on the right and his perfect cross was dispatched by Berra’s head for his sixth goal of the season - and the most vital.
Town: Bialkowski, Chambers, Smith, Berra, Mings (Parr 85), Skuse, Tabb (Williams 75), Bishop, Varney (Anderson 23), Sears, Murphy. Subs not used: Gerken, Chaplow, S.Hunt, Wood.
Blackpool: Parish, Maher, Clarke, O'Dea (Ferguson 30), Dunne, Perkins, O'Hara, Cubero (Delfouneso 86), Orlandi, Cameron (Osayi-Samuel 69), Madine. Subs not used: Boney, Telford, Oliver, Barkhuizen.