Ipswich Town 2 Chelsea 2
Ed De Goey made two saves in the penalty shoot-out as Chelsea progressed to the Coca-Cola Cup semi-finals, where they will face Arsenal.
Frank Leboeuf gave the visitors the lead in the shoot-out before de Goey dived to his left to save James Scowcroft's weakly struck shot.
Gianfranco Zola, Adam Tanner and Roberto Di Matteo were successful with their efforts but Tanner's kick was held by De Goey who lived low to his right.
Mark Hughes blasted his penalty past Richard Wright to earn Chelsea a victory they did not really deserve.
In the 112th minute Bobby Petta should have scored what would surely have been the decisive goal as both teams tired.
The Ipswich substitute was one-on-one against De Goey but from eight yards his left foot shot struck at upright.
Ipswich had played the better football against their Premiership opposition, and came back from a two-goal deficit to take this tie into extra-time.
Despite going into the interval with a 2-1 lead Chelsea were generally unconvincing against an Ipswich side who played some neat one-touch football.
The body language of Ruud Gullit, who had come on for the injured Andy Myers after 20 minutes, indicated that he was less than happy with some of his team-mates' passing and running while captain Dennis Wise gave young Danny Granville a public dressing down.
Gullit, making his first appearance since November and his seventh of the season, soon showed the style that has made him such an influential player, spraying the ball around with great precision.
Tony Mowbray went close with a header and Leboeuf made a desperate clearance from Mick Stockwell's curling centre but it was Chelsea, against the run of play, who took the lead in the 33rd minute.
Wright, rated the best young goalkeeper in England by many observers, came out to collect Leboeuf's long clearance but it became obvious he was going to be second to Graeme Le Saux.
The England defender centered from the left and Tore Andre Flo beat Jason Cundy to head the ball into the unprotected net for his eighth goal of the season.
Chelsea's second goal was a beauty, though. The move began when Gullit played the ball inside from wide on the right.
Zola, sporting a new short haircut, dummied and the ball went through to Flo. The Norwegian played a first time pass to Zola who had run into space and the Italian centered for Le Saux to score from inside the six yard box.
But in first half stoppage time Ipswich gave themselves a life-line. Mauricio Taricco played the ball to Alex Mathie, whose shot from 15 yards was only half-saved by De Goey.
Taricco, following up, scored from a narrow angle. Chelsea went close to extending their lead in the 56th minute following a centre from the right by substitute Steve Clarke.
Neither Zola nor Le Saux could make a clean contact with the ball which was cleared by the Ipswich defence.
The home side continued to play some effective, attacking football and their 62nd minute equaliser was superbly engineered.
Taricco played the ball down the right wing to Mick Stockwell, who pulled the ball back for Alex Mathie to score his fifth goal of the season with a first-time shot from eight yards and take the tie into extra-time.
There was a good-hearted mini-invasion from jubilant Ipswich fans, who quickly returned to their seats behind the goal.