City almost got off to the perfect start when Stuart Elliott chased onto Andy Dawson's long ball, but his shot rolled just wide in the opening minute.
An entertaining first half at Glanford Park ended goalless. Ben Burgess wasted City's best chance, while a block on the line and a diving Damien Delaney header deflected Scunthorpe's closest efforts away.
In the 65th minute, Steve MacLean fell in the box under a light challenge from Delaney, and Peter Beagrie despatched the penalty past Paul Musselwhite.
But a double substitution paid instant dividends as City drew level five minutes later. After a move down the right, Ben Burgess played a ball through for Stuart Elliott to race onto and lash it past Tommy Evans.
City should have taken all three points with an 84th minute chance. A ball over the top gave Jamie McCombe problems and he appeared to handle inside the area, but the referee waved play on as Ben Burgess squared the ball to Jason Price. However, he could only sidefoot his shot against a defender with the goal gaping.
But a fast-paced, highly competitive second half came to a close with derby honours even.
City line-up (4-4-2): Musselwhite; Hinds, Joseph, Delaney, Dawson; Price, Ashbee, Keates (Green), Holt (France); Burgess, Elliott.
Un-used subs: Myhill, Whittle, Melton.