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Erling Haaland scored twice after Phil Foden’s opener was cancelled out by Daizen Maeda to send Enzo Maresca’s side six points clear at the top of the table.
This was City’s first home game in the competition since being found guilty of breaking its financial rules.
After celebrating victory over Liverpool at a hostile Anfield in their first match since the verdict against the club was announced, the home fans showed their support for the club as they booed the Premier League anthem prior to kick-off and waved inflatable bananas in a recently revived tradition from the 1980s.
On the pitch, Maresca’s players continued to block out the uncertainty surrounding the club’s future admirably.
Haaland’s double ensured City joined Chelsea (2005-06) and Liverpool (2019-20) as only the third club in Premier League history to win their first seven games of a season.
Maresca, meanwhile, is the first manager to win his first seven games in charge of a club in the competition.
Ipswich temporarily stunned a raucous Etihad Stadium with a quick response to Foden’s opener, as Maeda slotted in 155 seconds later after getting the better of Marc Guehi.
But Haaland restored the hosts’ advantage before half-time and later put City in control with a composed finish after being played through by Iliman Ndiaye.
The Norwegian then believed he had his hat-trick after firing in acrobatically but the goal was disallowed for a marginal offside against Enzo Fernandez in the build-up.
Zian Flemming gave Ipswich late hope by slamming in a 90th-minute penalty following a foul by Guehi on Abdul Fatawu, but City were able to see out the 12 minutes of added time.
BBC