The young Foxes' winning streak came to an end at the hands of the Tractor Boys, who went ahead just six minutes in at Ipswich Town Training Centre.
Kellyan Olawole netted before Shakil Nicolaou doubled the home side's advantage just passed the half-hour mark.
In the second half, City did pull one back with less than 15 minutes to play through substitute Joseph Colangelo-Allen, but a stoppage-time third from Nelson Eze made sure the points stayed in Suffolk.
It leaves the side coached by Adam Barradell sitting fifth in the standings, on 30 points from 19 games, ahead of travelling to face Brighton & Hove Albion on Tuesday 17 March (11am GMT kick-off).
The details...
City: Hames, Simons, Diallo (c), Adedeji, Aideed (Colangelo-Allen 53'), W. Lawrence, Manyumba (Fletcher 71'), Sutherington (Boothe 63'), de Lisle, Owusu, Corden.
Subs not used: Jacklin, H. Lawrence.
Goal: Colangelo-Allen 76'