The 7,262 crowd were treated to four goals in seven minutes during a spell that saw the Championship side take the lead on two occasions through Paul Taylor and Lee Tomlin.
Twice Reading equalised, with Pavel Pogrebnyak and Chris Gunter on target, maintaining a frenetic pace that eventually subsided.
What proved to be the winner in the 38th minute was an own goal from Nathaniel Knight-Percival – the last of several defensive howlers that would have had both managers peering from behind their hands.
Reading signalled their intent to take the competition seriously by naming the same team that was beaten 4-2 at Chelsea last Wednesday.
A rollercoaster spell that began in the 12th minute was initiated when Taylor was on target after Tomlin had tested the Reading defence.
The lead was short-lived, however, as Pogrebnyak was able to scramble the ball home while on the floor following a period of sustained pressure from Peterborough.
The frantic pace continued and, with neither side seemingly willing to defend, another two goals arrived in quick succession.
Posh, who rested club captain Gabriel Zakuani, were back in front when Tomlin stabbed home from close range, but in the 19th minute it was all square once more.
This time it was Gunter who found the net, though there was a look of disbelief among the visitors as a tame shot slipped into the net.
Pogrebnyak then struck the right post as Peterborough’s goal came under attack once more.
The pace of the match finally died down, although only after the crowd greeted a simple save by Reading keeper Adam Federici with a loud cheer.
The Royals remained the more dangerous team, but they needed a hint of luck to take the lead for the first time with Knight-Percival nodding a cross into his own net.
Pogrebnyak danced through Peterborough’s defence 10 minutes into the second half but his backheel to Danny Guthrie failed to come off.
Half-chances fell at both ends but the game was no longer the ding-dong goal-fest that had lit up the Madejski Stadium before the interval.
But the small crowd were still treated to the odd eye-catching moment as both sides went in search of a further score.
Substitute Joe Newell should have equalised but his diving, stabbed shot careered over the crossbar, before Danny Swanson forced a magnificent save from Federici.