First-half goals from Kalifa Cisse and the Championship's leading scorer Kevin Doyle ended the Blades' eight-month unbeaten run at Bramall Lane.
Reading started in impressive fashion with Stephen Hunt picking out Andre Bikey who ran through unmarked to fire over the top when it seemed simpler to score.
Doyle carved out the opening goal on five minutes when his cross was met by Cisse who volleyed past Paddy Kenny from 12 yards.
United, with just one defeat in nine games, were shaken into life. Anthony Stokes' cross was met by James Beattie who pumped the ball back into the goalmouth as Reading finally cleared their lines.
Record signing Beattie, with four goals from his last two games, fired in one of his trademark long-range free-kicks over the target as the Sheffield side at last began to find their rhythm.
Reading, now playing with cohesion after an indifferent start to the season, could have had a second as skipper James Harper burst through from midfield, his stinging shot from 25 yards being cut out by the United keeper.
United then went close, centre-back Matt Kilgallon heading a Brian Howard corner narrowly wide before Doyle struck a minute before the break. The irrepressible Stephen Hunt curled in teasing free-kick for the Reading striker to finish with a diving header at the far post.
Blades boss Kevin Blackwell brought on Greg Halford and Billy Sharp to inject some life into his side and the changes almost paid off immediately.
Halford linked with Sharp on the right but, as Beattie looked to finish the move off with a close-range strike, the ball was scooped off the line by Marcus Hahnemann.
The American keeper was helpless minutes later though after Beattie stuck out a foot to reach Stokes' deep cross but, with Hahnemann flat-footed, the ball hit the foot of the post and was hacked to safety.
Reading remained cool in the closing minutes as the Sheffield sided forced them back, Hahnemann spreading himself to block Sharp's strike from eight yards.