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Two goals each from Matt Holland and Pablo Counago and others for Finidi George and Darren Ambrose left Micky Adams's side devastated although they did hit a consolation through Jon Stevenson.
The Foxes arrived at Portman Road with two wins out of two and looking to go top of the first division but were left reeling by an awesome second-half performance by the Town.
City were not helped by three injuries in the first half and by the break had used all their substitutes. James Scowcroft and Alan Rogers were also carrying injuries but had to continue to the end of the game.
City boss Micky Adams said: "This might have brought them down from the clouds they had put themselves on."
Ipswich manager George Burley, not always the easiest man to please said: "I thouroughly enjoyed that and it was good to send our supporters home happy, we scored six goals and it could have been more, it was a class performance full of energy and excitement.
"I set them a target of 100 goals for the season, we have got eight in two games, now we have to keep it going for the rest of the season."
Ipswich even had the luxury of missing a penalty when Marcus Stewart had a spot kick saved by Ian Walker and Ipswich had a claim for another penalty turned down when Jon Ashton clearly tripped Stewart.
Ipswich also had a goal disallowed from substitute George as they ran riot in the second half.
Republic of Ireland International Holland opened the scoring with a clever move to leave Frank Sinclair on the ground before curling the ball past Walker. His second was a defelcted shot from an Ambrose cross.
Counago's first took a deflection but there was no doubting his second while George provided a pin-point cross for Ambrose to head in and then the Nigerian International also scored with an angled shot