Royals skipper Matt Mills bagged a brace either side of a Hal Robson-Kanu strike, but his own goal in extra-time stoppage-time became Northampton's third equaliser after goals from Andy Holt and Kevin Thornton in the original 90 minutes.
Cobblers keeper Oscar Jansson saved the opening spot-kick from Simon Church and Jake Taylor blazed wide for the Royals, meaning successful efforts from Steve Guinan, Kevin Thornton, Michael Jacobs and Abdul Osman sent the League Two side through 4-2 in the shootout.
Reading started brightly and skipped past a pair of Northampton challenges before having a shot blocked in the third minute.
In the 17th minute Reading took the lead when Brian Howard drilled a low free kick into the Northampton box and Mills produced an exquisite backheel to leave goalkeeper Jansson with no chance.
But Northampton were gifted an equaliser three minutes later when Royals goalkeeper Ben Hamer fumbled Nathaniel Wedderburn's corner to leave Holt with a tap-in.
The visitors were almost in front shortly after when a deft flick from Tadhg Purcell fell narrowly wide.
Purcell went close again in the 52nd minute, sending a rasping effort past the post with Hamer stranded.
Reading made it 2-1 in the 62nd when Robson-Kanu scrambled home following a trio of Jansson saves from Karacan, Hunt and the goalscorer.
Northampton hit back immediately when Hamer parried Osman's shot as far as Thorton who finished from six yards.
Thornton slalomed through the Reading defence with five minutes remaining to draw a save from Hamer, and Northampton thought they had victory in second half stoppage time, but Guinan's close-range effort was flagged offside.
The visitors enjoyed the best opening in the first half of extra time as Guinan's fellow substitute Jacobs raced clear of the Royals backline, but Hamer was equal to the task and Mills hacked clear.
Moments into the second period Reading sprung into life and Jansson was at full stretch to save a piledriver from Shane Long.
Mills and Howard combined again as the centre-back thumped a header home from the midfield's corner, before the latter player rattled the post and Long had penalty claims waved away.
But Northampton forced extra time and Mills completed his hat-trick in the worst possible fashion, diverting Jacob's injury-time free kick into his own net.