Graham Dorrans hit his fourth penalty in four games to give West Brom a thrilling win which took them back to second place in the Championship table.
Keith Southern's low shot put Blackpool ahead but Roman Bednar rounded Paul Rachubka to level and then turned in Gonzalo Jara's cross to make it 2-1.
DJ Campbell hit the Albion bar before Blackpool debutant Stephen Dobbie ran at the defence and fired the equaliser.
Dorrans won it from the spot after Andy Butler fouled Ishmael Miller.
Blackpool boss Ian Holloway: "I said before the game that our next two matches could be defining. It is a shame we had to lose this one on a referee's penalty decision.
"My lads are shattered about that decision because they thought it was a fair tackle.
"However I thought we did well against a side I consider to be the best in the Championship. They have a class squad based on established Premiership players and we gave them a really good run for their money. They know that."
West Brom manager Roberto di Matteo: "This was a really hard fought match. We have to dig in and fight for the points. Not many teams come here and go away with anything but I am delighted with my players' performance.
"We took our chances well and Roman Bednar did his job up front with two well-taken goals."
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