Following successive PL2 draws, the Under-21s were back in action at Bearwood Training Ground in Berkshire, taking on the Royals for the first time this season.
Ben Petty opted to make three changes from the stalemate with Newcastle United a week ago and came up against an experienced Reading side, with several of their first team squad drafted in to gain minutes.
But after a goalless first half, it was the visiting Foxes who seized the initiative. Tawanda Maswanhise, fresh from making his senior debut earlier this month, scored the opener on 68 minutes, giving Leicester something to hold.
However, Kelvin Ehibhatiomhan struck with just over a quarter of an hour to play to level the scores and looked to have secured a share of the spoils for the hosts. They would go one better, however, snatching victory in the closing minutes of normal time courtesy of Caylan Vickers' goal.
A harsh ending for City, who slip to 21st in the 26-team PL2 table and prepare for the visit of Southampton to LCFC Training Ground in their next league encounter on Monday 29 January (7pm GMT kick-off).
The details...
City: Young; Cover, Wormleighton (c), Godsmark-Ford, Wilson-Brown; Raikhy, Cartwright, Briggs (Ewing 57'); Marçal, Maswanhise (Pennant 83'), Thomas (Richards 66').
Unused subs: Doherty, Ali.
Goal: Maswanhise 68'.