It was the first loss of the Sky Bet Championship campaign for the former leaders, ending their 100 per cent record and a record-breaking run of 21 games without defeat.
A dynamic opening 20 minutes at Portman Road saw four goals, all coming from Leeds players.
Joe Rodon netted an own goal to give Ipswich the lead, before the visitors replied with strikes from Georginio Rutter, Wilfried Gnonto and debutant Joel Piroe.
Ipswich kept the game alive when Nathan Broadhead netted for the Tractor Boys with virtually the last kick of a pulsating first half.
However, Leeds struck the killer blow in the 75th minute when Luis Sinisterra netted a fourth goal.
Although Conor Chaplin pulled one back for Ipswich in added time, they could not find an equaliser.
The hosts took the lead in the seventh minute when Kayden Jackson followed a lightning run down the left with a cross that took a big deflection off Rodon and beat goalkeeper Illan Meslier.
Leeds equalised three minutes later with Rutter’s first goal for the club. The £36million signing from Hoffenheim weaved his way through the penalty area and saw his shot go in off the base of the left-hand post.
The visitors took the lead in the 14th minute when Sinisterra’s cross found Gnonto, who drifted behind Leif Davis to scramble the ball home from close range.
It was 3-1 to Leeds with 19 minutes on the clock when home goalkeeper Vaclav Hladky could only parry a shot from Sinisterra, with Piroe – who joined from Swansea this week – converting the rebound.
Ipswich probed the Leeds defence in a bid to get back into the game and Broadhead got them a second goal after seven minutes of added time. He produced a cool finish after Jackson nicked the ball ahead of Meslier and pulled it back from the byline for the Welsh international to score.
Sinisterra had a wonderful opportunity to extend the lead for Leeds when he was found alone in the Ipswich penalty area but he shot straight at Hladky.
The visitors posed a threat on the counter-attack and Hladky had to divert a first-time shot from Piroe behind for a corner before Colombian international winger Sinisterra breezed past substitute Brandon Williams to make it 4-2.
Chaplin drilled a low shot into the bottom corner of the net with seconds remaining and soon after the 2,008 visiting Leeds fans in a crowd of 29,606 were pleased to hear the final whistle.