Skipper Ben Jacobson stuck away the winning penalty to send Blackpool through to the fifth round of the FA Youth Cup.
There was nothing to separate the two sides after 120 minutes of highly competitive football played out in a snowy Bloomfield Road.
The Saints, a Category One academy side, took the lead in an evenly contested first half when their skipper Christoph Klarer bundled home at the back post from a corner.
But the young Seasiders fought back with a superb second half performance and got themselves back on level terms through Finlay Sinclair-Smith.
There was minimal goalmouth action in extra time, meaning it went to spot kicks to decide the tie and Jacobson struck the killer blow to send Blackpool through after goalkeeper Craig Thordarson had made two fine saves.
Blackpool will now face a trip to Ipswich Town in the next round after they beat Dagenham & Redbridge 2-1 at Portman Road.
All fifth round ties must be played by Saturday, February 10.
Blackpool’s Rowan Roache, who made his league debut for the Seasiders in the weekend’s draw against Bristol Rovers, had the first effort of the game but his shot from range deflected nicely into the hands of keeper Alex Cull.
After a slow start, the Saints slowly began to assert their dominance and should have taken the lead after eight minutes.
They carved open Blackpool’s defence and found the unmarked Harlem Hale at the back post but, with the goal at his mercy, he could only send his half volley over the bar.
The Seasiders came even closer to finding the back of the net a few minutes later when Jack Newton decided to have a pop from 25 yards and his effort skimmed the top of the crossbar.
With just 18 minutes gone, Southampton skipper Christoph Klarer handed his side the lead, bundling home at the back post after Blackpool had failed to clear their lines from a corner.
The home side thought they had a good shout for a penalty when Owen Watkinson was bundled to the floor inside the box but the referee waved away the appeals.
The Saints had a good chance to double their lead when two of their players were left unmarked at the back post, but Michael Obafemi couldn’t find either of them with his pass.
Hale missed another good chance for the visitors with a volley from the penalty spot which he sent wide of goal.
Jonathon Afolabi was the next to squander a good chance when he fired into the side netting, before William Smallbone thundered a strike from 25 yards onto the post in the last action of the half.
The Seasiders made a bright start to the second period and soon found themselves level through Finlay Sinclair-Smith. The diminutive forward beat his man on the edge of the area before firing low into the bottom corner.
Blackpool had a good chance to take the lead when a corner dropped to the unmarked Dylan Sumner but he couldn’t get the required contact on his shot to trouble the goalkeeper.
The visitors created a half chance on the break when Afolabi outmuscled Thomas Williams to maneuvre himself some space before shooting well wide.
With ten minutes left on the clock, Southampton allowed Sumner too much room to move towards goal but he sent his shot narrowly over the bar.
Watkinson almost got in behind but Saints defender Harrison Davis recovered to crowd him out before he could shoot at goal.
Blackpool were so close to finding a late winner after working the ball into the box brilliantly; Roache finding Sinclair-Smith who could only fire wide after cutting inside his man.
With the score still level after 90 minutes, a period of extra time was in order to separate the two sides.
The Saints had an early opportunity to put themselves back in front when they were given an indirect free kick inside the Pool box, but the defensive wall stood firm to deny Smallbone’s effort.
Southampton were in control of the first half of extra time but still couldn’t find that breakthrough, with Thordarson getting down to make a smart save from Smallbone.
Blackpool came a whisker away from taking the lead in the first minute of the second half. Jack Newton tried his luck from range and send his shot narrowly wide of the post, with the keeper well beaten.
The Saints ended the game in the ascendancy and Blackpool were thankful to Thordarson who made another good save to deny substitute Kornelius Hansen with what proved to be the last action of the game.
Instead, penalties were required to separate the two teams and it fell to Thordarson to make two vital stops before Jacobson stuck away the winning penalty - Pool winning it 4-2 on the shootout.
Blackpool: Thordarson, Williams, Jacobson, Newton, Avon, Sumner, Adarkwa (O’Brien), Sinclair-Smith, Shaw, Roache, Watkinson (Jaaskelainen)
Subs: Winstanley, Simson, Wainwright
Southampton: Cull, Davis, Vokins, Brennan, Ramsay (Ledwidge), Klarer, Hale (Robise), Siu (Hansen), Obafemi, Smallbone, Afolabi
Subs: Parkes, Bartlett