Goals from Stephen Ireland, Roque Santa Cruz, Joleon Lescott, Carlos Tevez and Michael Johnson kept City on course for their first piece of silverware since 1976.
In doing so, City also preserved their perfect record against the Iron as they have won all five meetings against the Championship side, scoring a remarkable total of 26 goals in the process.
City handed full debuts to Paraguay striker Santa Cruz and Brazilian defender Sylvinho as they made six changes from the starting line-up from Sunday's Premier League match against Fulham.
The changes didn't disrupt City who took little more than two minutes to make the breakthrough when Shaun Wright-Phillips released Ireland who broke forward before finding the net with a low shot from outside the penalty area.
If City thought this was the prelude to a comfortable stroll to victory they were sadly mistaken as the Iron staged a spirited fightback.
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They were rewarded with a 26th-minute equaliser when Marcus Williams opened the City defence with a low cross from the left which was slotted home by striker Jonathan Forte.
Stunned City were forced to raise their tempo as they regained the lead in the 38th minute when Santa Cruz marked his first full appearance with a goal, a well-directed header from eight yards.
City were denied a third goal shortly before the break when Gareth Barry ghosted from deep to meet Sylvinho's cross only to see his effort strike the upright.
Any hope of another Iron fightback was extinguished 11 minutes after the restart when central defender Lescott scored City's third with a towering header from a Wright-Phillips corner.
And City were denied a fourth goal moments later when Ireland's toe-poke past keeper Joe Murphy was cleared off the line by Niall Canavan.
But goal number four eventually came when Tevez converted a cross from substitute Vladamir Weiss.
It got even better for City when substitute Johnson, the midfield man who is only just easing his way back after a year-long lay-off, fired home a spectacular fifth goal from long range.
Manchester City v Scunthorpe United - As it happened