Danny Drinkwater's long-range rocket, his eighth goal of the season, cancelled out Alex Pearce's header for the Royals - whose wait for a first home win since January goes on.
Nigel Pearson's Foxes are now seven points clear of second-placed Burnley with four games left while Reading are clinging on to sixth, ahead of Brighton thanks to a goal difference of one.
Pearson had called for a response from his side after the Seagulls had spoiled their promotion party last week with a 4-1 win, and they almost got off to the perfect start.
Striker Jamie Vardy, back in the team after a spell out injured, thought he was back amongst the goals after eight minutes when he tapped in Jeff Schlupp's cross - however, he was controversially ruled offside.
Instead the Royals took the lead after 15 minutes.
Jordan Obita swung a deep free-kick into the box and Pearce guided a brilliant header back across Kasper Schmeichel and into the bottom corner.
Having developed a taste for scoring again the hosts almost doubled their advantage when Garath McCleary gave Schlupp the slip on the byline and slid the ball to Jobi McAnuff three yards out - but Schmeichel managed to save with his legs.
Reading should have been awarded a penalty when Dean Hammond clearly handled as he challenged Pavel Pogrebnyak in the air but referee Simon Hooper saw nothing - just as he did before the break when Schmeichel palmed McCleary's attempted lob wide, only for the official to give a goal-kick.
But by then Leicester had equalised through a superb goal from Drinkwater.
Reading half-cleared a corner to the midfielder some 25 yards out and he lashed it back through a crowded penalty area and into the net with keeper Alex McCarthy rooted to the spot.
Both sides had chances to snatch all three points after the interval, with Pogrebnyak heading McCleary's cross against the foot of a post and Drinkwater denied a second by the face of McCarthy.
Mikele Leigertwood, back from a long-term ankle injury, came on as a second-half sub for Reading but his only contribution was to collect two bookings in a quarter-of-an-hour to leave the hosts to play the last few minutes with 10 men.