A spirited fightback from the Royals earned Chris Cummins' side a deserved point against Arsenal at Madejski Stadium.
Nigel Neita put the Gunners ahead after half an hour, but Tariqe Fosu hit back for the Royals early on in the second half - before the highly-rated Thomas Eisfeld restored the visitors' lead.
But Niall Keown, son of Arsenal legend Nigel, played his part in a stoppage-time equaliser - as his header was flicked on by Craig Tanner.
In a bright start to the game to match the shine of the December sun, the Gunners found the net but were denied by the offside flag - before the Royals threatened once or twice on the Arsenal goal.
But the visitors took the lead on 31 minutes, perhaps against the run of play, when Neita placed a precise strike past the helpless Jon Henly.
This prompted a response from the Royals, who dominated before and after half-time - and grabbed a deserved leveler when Jordan Obita's excellent cross found the head of Fosu.
Reading looked the more likely to win the game from here on in - but the talented midfielder Eisfield put the Gunners ahead once again, though Henly got something on the strike.
It was almost three for the North Londerers - straight from a corner! The set-piece came straight back off the post and into safety, before the Royals launched another attack.
It was one way traffic after that - and the Royals equalised for a second time as, in the 90th minute, Keown's header was flicked on by Tanner and past Martinez.
Cummins' side could have even nicked it in the dying seconds and the young Royals piled forward - but the entertaining Sunday afternoon affair ended 2-2.
The result means the U21s narrowly miss out on making the 2013 Elite league - but there were plenty of positives to take from a deserved point against a very talented Gunners side.
Coach Cummins was pleased with what he saw: "It was really pleasing, I think we've ended up with seven or eight scholars on the pitch which is a real positive for the club.
"It was great to see the fans come out, they got behind them, they’ve seen the lads that are coming through. I don’t think there’s anything better than seeing a local lad come through and make the first team and there’s a few that have got a chance as well."
Royals: Henly; Arnold, Griffin (Long 63), Keown, Sweeney; Fosu (Kelly 83), Edwards, Tshibola, Obita; Tanner, Samuel.
Subs not used: Lincoln, Losasso, Webb.
Arsenal: Martinez, Bellerin, Bihmoutine, Hayden, Monteiro, Angha (Hajrovic 86), Olsson, Toral, Ansah (Akpom 63), Eisfeld, Neita.
Subs not used: Cooke, Fagan.