LAST-GASP Gabriel Tamas' first-ever Baggies goal extended Albion's unbeaten run to six games in yet another dramatic encounter between the two clubs.
The on-loan Auxerre defender sent the huge away following into raptures with a thunderous 86th-minute equaliser at the Madejski Stadium.
Early defensive sloppiness cost Albion against the Royals - and not for the first time this season - as Gylfi Sigurdsson opened the scoring in the sixth minute.
And although the visitors enjoyed the lion's share of possession as they chased the game, they needed a brilliant display by England keeper Scott Carson to keep them in the match.
It looked like being a frustrating day at the opposite end as chances continued to come and go for Roberto Di Matteo's men.
But they found salvation in the form of Tamas, who became the club's 20th different scorer this term.
With six matches remaining, the Baggies are now nine points clear of nearest-rivals Nottingham Forest, who play their game in hand at leaders Newcastle on Monday.
Chris Wood was handed his first start in five months as Di Matteo made four changes - two enforced.
Jonas Olsson (calf) returned from injury and James Morrison and Jerome Thomas earned recalls in midfield.
The men to make way were benched pair Ishmael Miller and Abdoulaye Meite plus injured widemen Chris Brunt (ankle) and Robert Koren (calf).
Brian McDermott made one change to his Royals side, with Brynjar Gunnarsson coming in for Jay Tabb.
Thomas was in the thick of the action in the fourth minute as he beat Andy Griffin down the left and slid the ball into the box where Zurab Khizanishvili just prevented Graham Dorrans from getting a shot away with a last-ditch lunge.
But the hosts hit the Baggies with a sucker punch two minutes later when Jobi McAnuff broke clear from the halfway line and forced a good save from Carson.
The rebound fell to Jimmy Kebe, whose shot was cleared off the goalline by Tamas, only for Sigurdsson to knock the loose ball into the net.
It meant the opening goal in all four meetings between the two sides this term has come in the first six minutes.
Albion responded positively and, three minutes later, Dorrans' near-post cross was met by Wood, whose effort was deflected just wide by Ryan Bertrand.
From the resultant Dorrans corner, Tamas' powerful near-post header was brilliantly tipped over by Federici.
Another corner, in the tenth minute, eventually found its way out to Steven Reid and he volleyed inches wide of the right-hand post from 25 yards.
At the other end, a similar effort from Bertrand whistled past the left-hand post - but Carson had it covered.
A mazy run by Dorrans in the 13th minute saw him prod the ball to Morrison who forced Federici into a low save to his right with a 12-yard drive.
From Dorrans' ensuing flag-kick, the busy Ben Watson headed straight at Federici, as the chances kept coming and going for Albion.
They almost paid a heavy price for their misses in the 22nd minute when Brian Howard broke free and was only denied by a superb Carson block.
The Baggies keeper also deserved a little bit of luck and got it when Joe Mattock cleared Sigurdsson's header from the rebound off the goalline.
Three minutes later, Wood exchanged a one-two with Dorrans before curling a 20-yard effort wide of the right-hand post.
Reading's lone frontman, Shane Long, threatened from a corner in the 36th minute but his goalbound header from Howard's corner was nodded clear by Watson.
Olsson had a moment of madness seven minutes before the break as he allowed the ball to bounce on the edge of his own box, without realising Kebe was lurking dangerously.
Fortunately for the Swede, he was able to recover and stretched to hook the ball clear.
Howard's defence-splitting pass put McAnuff in in the 43rd minute and he forced Carson into a low save to his right with a 15-yard drive.
The end-to-end nature of the game continued with Wood and Thomas eventually working the ball to Watson on the edge of the box in the first minute of first-half stoppage time.
But the on-loan Wigan midfielder struck a low 18-yard shot straight down the middle and made it a comfortable save for Federici, leaving the visitors trailing at half time.
Carson came to the Baggies' rescue again four minutes into the second half as Long found Kebe in the box. The ex-Liverpool shot-stopper smothered at Kebe's feet and grabbed the ball at the second attempt, aided by Mattock.
Khizanishvili looped a header goalwards from Howard's back-post free-kick in the 53rd minute, but Carson again dealt with the danger by gathering under his crossbar.
Referee Andy D'Urso waved away Albion penalty appeals on the hour mark as Dorrans flicked Tamas' pass up in the box, with the ball appearing to strike Matthew Mills' hand.
Seconds later, Watson jinked past Khizanishvili in the box and seemed to be brought down by the centre-half's clumsy challenge .
But Essex official D'Urso again rejected the Baggies' protests.
Di Matteo made a double substitution in the 62nd minute as Giles Barnes and Miller came on for Youssouf Mulumbu and Wood respectively.
Morrison shuffled inside and Barnes lined up on the right, with Miller up top.
Royals sub Simon Church almost made an instant impact as he caught Albion's defence flat-footed from Howard's pass and dinked his finish over Carson - but wide of the right-hand post.
Di Matteo made his final change in the 78th minute when Morrison made way for ex-Royal Simon Cox.
Despite looking weary, Albion kept plugging away and their never-say-die attitude was rewarded with a priceless equaliser four minutes from time.
Olsson's towering header from Dorrans' right-wing corner came back off the crossbar and Tamas smashed the ball into the roof of the net from ten yards.
Incredibly, both teams could have won it in the dying minutes.
A minute after their leveller, Miller was put clear by Dorrans and he only needed to square for Cox, who would have had the easiest of tap-ins, but got caught in two minds and was dispossessed by Bertrand.
Reading then almost nicked a winner but the brilliant Carson saved one-on-one from Kebe after he went clean through from McAnuff's pass.
The Baggies then looked like stealing all three points in the second minute of stoppage time when Dorrans went through on goal, only to be hauled back by Sigurdsson, who should have been sent-off but was only booked.
READING (4-5-1): Federici; Griffin, Khizanishvili, Mills, Bertrand; McAnuff, Sigurdsson, Howard, Gunnarsson (Rasiak 88), Kebe; Long (Church 65). Subs not used: Hamer (gk), Henry, Robson-Kanu, Karacan, Pearce.
ALBION (4-5-1): Carson; Reid, Tamas, Olsson, Mattock; Morrison (Cox 78), Mulumbu (Barnes 62), Dorrans, Watson, Thomas; Wood (Miller 62). Subs not used: Kiely (gk), Moore, Zuiverloon, Meite.
GOALS: READING - Sigurdsson (6). ALBION - Tamas (86).
BOOKINGS: READING - Griffin (foul 64), Bertrand (foul 70), Mills (foul 76), Sigurdsson (foul 90+2). ALBION - Reid (dissent 51), Watson (dissent 90+3).
REFEREE: A D'Urso (Essex).
ALBION STARMAN: Scott Carson.