The Hammers, who had drawn their last five home matches to slip out of the top two, were leading through Carlton Cole's strike as half-time approached.
Not only that, Sam Allardyce's side were also putting in comfortably their best performance in front of their own fans this season.
But, the match, and possibly West Ham's entire campaign, turned in the space of two minutes.
Totally against the run of play, Kaspars Gorkss equalised from a corner in the 44th minute and then, in first-half stoppage time, Noel Hunt fired Reading into an unlikely lead.
In the second half Ian Harte added a third from the penalty spot and, although Ricardo Vaz Te pulled one back, any hopes of a comeback were extinguished by Mikele Leigertwood's disputed fourth six minutes from time.
After booing their recent bore draws, the West Ham fans at least got the entertainment they craved, but their side now appear destined for the play-offs.
Yet it had all looked so different after seven minutes when Cole fired the Hammers ahead.
Kevin Nolan's neat footwork sent Matt Taylor away down the left and the United skipper arrived in the area to meet the return ball with a firm downward header which hit the foot of Adam Federici's post.
The ball fell to the feet of Cole who took a touch before thumping it past the grounded Federici for his 10th goal of the season, and his first in 10 games.
Reading should have equalised in the 23rd minute but Hunt's fierce drive from eight yards out was headed clear by James Tomkins.
However, the hosts seemed well in control and Vaz Te headed straight at Federici before firing over from close range.
But, instead of pushing home their advantage, West Ham promptly fell to pieces by conceding a soft leveller a minute before half-time.
Harte swung in a routine corner but defender Gorkss got in ahead of the flat-footed Nolan to head in at the near post.
And the hosts were stunned in first-half stoppage time when Julien Faubert's challenge on Jason Roberts served only to present the ball to Hunt, who made no mistake with a low drive past Rob Green from 12 yards.
Things got worse for West Ham 12 minutes into the second half when Hunt tumbled over Abdoulaye Faye's challenge in the area and referee Chris Foy pointed to the spot, allowing Harte to step up and convert the penalty.
With 15 minutes left Vaz Te's towering header from Gary O'Neil's corner threatened a home fightback.
But instead Leigertwood rammed home the fourth despite Hunt being well offside when the ball clipped his heels and bounced to the midfielder.
West Ham's luck was well and truly out - and their hopes of automatic promotion have been severely dented.