Steve Coppell's side had previously been unbeaten for 20 games but their record came crashing down in the main due to Arsenal's clinical finishing.
Arsene Wenger played a host of teenagers but kept over £23million worth of talent at the spearhead of his attack in Jose Antonio Reyes and Robin van Persie.
The Royals might be heading the Championship but those two players were practically worth more than double their entire team and their quality showed through.
Van Persie was first to show on four minutes when he looked destined to open the scoring but his venomous shot was deflected just wide.
Reading came to play and marksman Dave Kitson had captain for the evening Manuel Almunia scampering to make two saves from the flame haired attacker in as many minutes.
Arsenal got the breakthrough at a vital time with a typical goal. Dutch winger Quincy Owusu-Abeyie won possession on the left and then slipped a delightful ball between the Reading rearguard for Reyes to accelerate on to before rounding the keeper and guiding the ball home from an acute angle.
Van Persie tested Graham Stack, still an Arsenal player until January at least, with a 20-yard shot form a tight angle that the young keeper parried to safety.
Arsenal's defenders also got in on the act in the shape of Philippe Senderos who hit an overhead kick from inside the box on 18 minutes which flew just over.
Senderos may have been still thinking about his narrow miss when moments later he let the ball past allowing Leroy Lita to nip in but the striker was denied by a brave block from Almunia.
On 28 minutes former Gunners trainee James Harper was unlucky to see his clever lob tipped over by Almunia and then John Oster had a shot that flew just wide.
Reading were coming more into the game and had a great chance on 40 minutes when Lita chested down into the path of Steve Hunt but Arsenal's Spanish keeper was again in the right place to smother the attack.
A minute later Kitson rose unmarked to meet a cross but, although the Reading striker's header had plenty of power, it went straight to Almunia who gathered at the second attempt.
The Gunners then turned defence into attack when Sebastian Larsson threaded a beautiful ball to Reyes who teed up van Persie and he struck the ball sweetly with his left boot into the bottom corner of the net from 20 yards.
Reading couldn't maintain the pace in the second half and Stack was called upon to produce some superb saves.
The match was put of reach on 65 minutes by Arturo Lupoli. The 18-year-old had just come off the bench when he robbed Ibrahim Sonko just inside the Reading half and rounded the keeper before slotting home from the tightest of angles.