The result kept their hopes of progressing to the knock-out stages of the competition alive.
On a wet and blustery Friday afternoon at Solihull Moors' Autotech Stadium, Richard Beale's young charges initially struggled to get going against a well-organised and incisive Reading outfit and found themselves 2-0 down by half-time.
But the introduction of substitute Odin Bailey at the break and his two goals saw Blues largely dominate the second-half and they were a touch unlucky not to go on and win the contest.
Blues fashioned their first opening less than five in when Jude Bellingham ran half the length of the pitch with the ball before laying it off to Josh Andrews. He slid it into the path of Olly McCoy deep inside the left of the box, but his sidefooted effort was well blocked by a Reading defender Teddy Howe.
At the other end of the pitch Blues 'keeper Zach Jeacock did well to push away Jordan Holgrove's powerful attempt, but the follow up shot was deflected behind for a corner.
The ball was sent it and Reading centre-back Tom Holmes rose highest to nod the ball home for the visitors in the 12th minute.
Reading were enjoying the majority of the possession, with Blues struggling to put any real decent passages of play together.
Ryan Stirk was not too far away when he tried his luck with a stinging shot from 25 yards, but his attempt flew a couple of yards over the bar.
Blues picked up two bookings in the space of a minute as they sought to deny Reading hitting them on the break. Olly McCoy went into the referee's notebook on 23 followed by Andrews.
With just over half an hour played Ryan Burke hit a powerful left-footed effort that just flashed beyond the far post.
But it was Reading that extended their advantage on 34 minutes after Blues were caught on the break before Joel Rollinson was played in to slot the ball home.
Half-time: Blues Under-23s 0 Reading Under-23s 2
Both sides made a change at half-time with Bailey sent on in place of Andrews for Blues and Conor Lawless replacing Holsgrove for Reading.
Blues started the half with greater purpose and forced a corner after 54 minutes. Bellingham swung a dangerous ball in, but Geraldo Bajrami headed over from close range.
But three minutes later they found themselves back in the contest after pulling a goal back.
Bellingham was the creator as he took the ball into the area after good pressing by Caolan Boyd-Munce earned possession high up. Bellingham drew the goalkeeper and then eased the ball to his left where Bailey had the simple task of sidefooting it home.
And just five minutes later the same player levelled the scores with his second goal of the game.
Reading failed to defend their lines and Bailey was quickest to react as he diverted the ball into the back of the net.
He did so acrobatically, sticking out his left leg to guide the ball in after Corey O'Keeffe, who was a dominant force after the break, got through and tried to lift the ball over the goalkeeper who made a parrying save.
Buoyed by their equaliser, Blues continued to keep the pressure up and Bellingham was denied by Reading 'keeper Jokull Andresson who saved with his legs at the near post after he bore down on goal.
Blues were forced into a second change with just under 15 minutes of normal time remaining after Boyd-Munce limped off with an injury, with Kyle Hurst sent on for him.
With the game heading into the final 10 minutes, it started to really open up for both sides.
Reading twice went close through Adam Liddle, but with just two minutes of normal time remaining, Bailey came desperately near to claiming a winner, but his stinging low shot was knocked up and over his own bar by Andresson after it bounced awkwardly in front of him.
Then with four minutes of stoppage time gone, the ball broke to Hurst following a corner, but he was only able to usher his shot into the sidenetting.
Full-time: Blues Under-23s 2 Reading Under-23s 2
Blues: Jeacock, Hutton, Burke, Stirk, Bajrami, Redmond, O'Keeffe, Boyd-Munce (Hurst, 76), Andrews (Bailey, ht), Bellingham, McCoy.
Subs (not used): Luyambula, Baker, Forrest.
Goals: Bailey (57), (62)
Bookings: McCoy (23), Andrews (24).
Reading: Andresson, Green, Holmes, Odimayo, Howe (Balogun, 87), East, Holsgrove (Lawless, h/t), Nolan (Pendlebury, 82), Olise, Rollinson, Liddle.
Subs (not used): Roberts.
Goals: Holmes (12), Rollinson (34).