After back to back wins over Middlesbrough and Man City, Steve Coppell's side were brought back to earth by Rafa's Reds.
Marek Matejovsky had given Reading a 5th minute lead but Javier Mascherano on 19 mins made it 1 - 1 at half time. Liverpool goal machine Fernando Torres scored the winning goal 3 mins into the 2nd half.
Reading are 3 points ahead of Bolton who sit in 18th place. Fulham's 1 - 0 win over Everton on Sunday bring them back into the battle for survival.