Reading's youngsters were edged out by Fulham after a thrilling finish at Hogwood Park in the Barclays U21 Premier League.
The Cottagers, who remain unbeaten in this season's competition, scored a winner in the 89th minute after Jake Taylor had grabbed a dramatic equaliser for the Royals.
Fulham were presented with an opportunity to take the lead in the first ten minutes as Chris David tumbled in the box to earn a spot kick, however Scotland under 19 international Jon Henly performed heroics for the home side - saving well to keep the scores level.
Reading were screaming for a penalty of their own shortly afterwards as Gozie Ugwu was sent sprawling inside the six yard box as he ran through on goal, however on this occasion the referee waved play on.
Towering Fulham defender Stephen Arthurworrey twice headed over the bar for the visitors in the first period, before they eventually took the lead shortly after the break.
Lasse Vigen Christensen arrived late into the box to bundle into an empty net, after the ball was well worked across from the right wing.
Centre back Jake Cooper then headed a decent chance off target for Reading, before Dominic Samuel did brilliantly to earn his side a spot kick - only to send the second penalty of the afternoon over the bar.
The equaliser wasn't too far away though, Samuel again involved as he controlled neatly before sending Taylor in on goal - and the Royals captain fired home past Neil Etheridge at the second attempt.
However, just as Martin Kuhl's side seemed to have earned a decent point, a lapse in concentration at the back presented the Cottagers with a golden opportunity to steal a victory - and they did so as the ball was swept home from ten yards.
Reading XI: Henly; Long, Griffin, Cooper, Keown (Partridge 60; Tshibola, Taylor (C), Obita (Fosu HT), D'Ath; Ugwu (Kuhl 71), Samuel.
Subs not used: Moore, Murombedzi
Fulham: Etheridge, Passley, Kavanagh, Diarra, Arthurworrey, Grimmer, Tue Na Banga, Christensen, Islamovic, David (Tankovic 73), Plumain (Richards 69)
Subs not used: Joronen, Minkwitz, Buatu