Gary McSheffrey inspired the Sky Blues to a first win under new boss Micky Adams and a first success since New Year's Day as he scored the equaliser and played a major role in Stern John's 72nd-minute winner.
The victory moved Coventry four points clear of the Championship relegation zone but left Reading boss Steve Coppell lost for words after seeing his side throw away a lead secured by former England striker Les Ferdinand's first goal for the club.
Reading looked to be heading for a first league win since Boxing Day when Ferdinand headed them in front after only eight minutes, diving headlong to turn home Nicky Shorey's left-wing cross.
But even that early strike, coupled with the return from injury of 12-goal top scorer Dave Kitson, failed to lift Reading spirits - and Coppell was at a loss to account for the capitulation.
"I cannot explain what happened in the second half," moaned the Royals boss.
"Eight games ago we were in a great position but now we must be the worst team in the league."
He added: "I'm bemused at how the team that got us into that position are now struggling to play any composed football or to dig themselves out of a hole."
Kitson had two half chances to add to Ferdinand's early strike, but his shot and header both lack the necessary power to seriously trouble Ian Bennett on his Coventry debut.
The Birmingham goalkeeper was playing his first game since signing on loan for the Sky Blues and Adams also gave a debut to striker Trevor Benjamin, who joined from Northampton Town on Friday.
But it was McSheffrey, naturally a striker but outstanding in a wide position against the bamboozled Royals, who led the Coventry recovery.
He cut in from the left and made space for a clinical finish into the top right-hand corner to haul the visitors level after 63 minutes.
And the diminutive dynamo also played his part in the winner, leading to Benjamin nodding across goal for John to side-foot home after losing marker Ivar Ingimarsson.
"Since I have been here Gary has been outstanding, whether it has been at centre forward or out wide. But it was not only him but the whole team generally which pleased me today," said Adams after recording his first win in four attempts."
"We have finally given a 90-minute performance," he added after victory moved City above fellow strugglers Plymouth Argyle.
Victory would have been even sweeter had Reading keeper Marcus Hahnemann not dived at the feet of the forward rushing McSheffrey in the closing minutes.
However, Reading also had chances to hit back late on as their search for an equaliser became increasingly frantic.
Bennett denied midfielder Andy Hughes with a fine save at full stretch before defender Ingimarsson blazed over the crossbar after the ball dropped to him in space deep into stoppage time.