A last-gasp winner from Theo Walcott saw Arsenal overcome their League Cup opponents 7-5 in extra time, after battling back from 4-0 down - but Premier League sides Southampton, Sunderland and Wigan all crashed out the competition.
Arsenal stage remarkable comeback to edge 12-goal cup thriller against Reading
Arsene Wenger admitted Arsenal swung from "disaster to pride" during tonight's heart-stopping 7-5 Capital One Cup victory at Reading.
Arsenal mounted an incredible comeback from 4-0 down to snatch the game League Cup fourth-round tie 7-5 after extra time.
Theo Walcott was the hero, claiming a 95th-minute equaliser to force extra time and then firing home the decisive goal in the dying seconds of the game.
"We went from disaster to pride because we came back in the second half with a decent performance," the Arsenal manager said afterwards
"At one point all we had was hope because it didn't look like we'd go through. But we got the disastrous first half out of our system.
"The ninth goal looked like the winner because Reading had given a lot and mentally were down. But we looked comfortable in extra time.
This competition was not one of our priorities but had we gone out in the way we could have, that would not have been one of my proudest moments.
"I was very proud of the way we responded in the second half."
The win enabled Wenger's men to take their place in the last eight for the 10th successive season, but Brian McDermott, the Reading coach and a former Arsenal player himself, was left to wonder how victory had eluded his side.
"It was suicide what went on in the second half and extra time," he said.
"You play each game on its merits but it was extraordinary. I've never seen anything like it. We have to dig deep and move onto the next game versus QPR."
Wenger made 11 changes to the Arsenal team that beat Queens Park Rangers 1-0 on Saturday and Reading tore into them from the off, with Sean Morrison heading against the post after two minutes.
The onslaught did not let up, and the hosts were 3-0 up after 20 minutes through a Jason Roberts volley, a Laurent Koscielny own goal, and a howler from Arsenal goalkeeper Damian Martinez that allowed Mikele Leigertwood to score.
Noel Hunt's header made it 4-0, before Walcott dinked the ball over Reading goalkeeper Adam Federici to pull a goal back for Arsenal in first-half injury time.
It looked destined to be a mere consolation, but goals from substitute Olivier Giroud and Koscielny — at the right end — gave Arsenal hope.
Walcott squeezed a shot over the line in the 95th minute to take the game to extra time, with Carl Jenkinson following up to make sure.
Reading's players were angry that more than the allotted four minutes of injury time had been played, and they were given further reason to curse their luck when Marouane Chamakh drove home to put Arsenal ahead in the 103rd minute.
Unbelievably, there was more drama to come.
Pavel Pogrebnyak headed in to make it 5-5 with five minutes to play but with penalties looming, Walcott slammed home to restore Arsenal's lead before Chamakh lobbed Federici to complete a remarkable evening of sport.
Although Reading fell short in the most agonising fashion, there were upsets elsewhere on Tuesday.
Second-tier Leeds United followed up their victory over Everton in round three to beat Premier League Southampton 3-0 and reach the last eight for the first time since 1996.
Championship side Middlesbrough won 1-0 against neighbours Sunderland, while League Two's Bradford City sprang a major shock with after knocking out Wigan Athletic 4-2 on penalties.
There was no fairy tale for League One Swindon Town, however.
The former Premier League club, managed by Paolo Di Canio, fought back from 2-0 down to level with Premier League Aston Villa, only for Belgian striker Christian Benteke to hit a 90th-minute winner for the visitors.