Tom McIntyre's last minute winner was enough to snatch all three points at Bramall Lane, just one minute after the hosts had equalised.
The Blades had been unbeaten in their previous eight home matches and were sitting pretty in sixth place with matches running out.
Despite creating countless half chances, the hosts had to wait until the 89th minute to believe they had snatched a point through Iliaman Ndiaye, but McIntyre's 90th minute strike was enough for the three points.
Paul Ince made two changes for the trip to Sheffield, with left-back Baba Rahman returning to the side for the first time under Ince, and Ovie Ejaria coming in for Canada international Junior Hoilett.
Likewise, Paul Heckingbottom made two changes for his side with Ben Osborn and Conor Hourihane returning to the team.
Reading started on the back foot, with Sheffield United roared on by a crowd of over 28,000 and looked determined to make early pressure pay. Despite numerous half chances, the Blades failed to create an effort on target, with former Royal Ollie Norwood going nearest when his strike was fired over the bar. However, the Royals grew into the game and it was them who took the lead just before the 20 minute mark. Midfielder Laurent picked up the ball in the centre of the pitch and drove toward the hosts’ penalty box. The former Shrewsbury Town favourite threaded a pass through to Joao, and after a couple of twists and turns smashed the ball into the roof of the net past a helpless Wes Foderingham.
The visitors were in the ascendancy in the first half from that moment on, with a passionate fanbase making their frustrations clear to those in red and white. It could have been worse, with Tom Ince forcing the goalkeeper into a smart save not 10 minutes later, and Joao went one better and hit the post in the final 10 minutes of the half after Ejaria intercepted a loose pass and set the Angola-international clear through the heart of the Blades defence. The hosts came close to equalising on a number of occasions, most notably a shot cannoning off McIntyre in the Reading half after a deep cross was nodded down by Oli McBurnie.
They went close in added time too, when Ben Osborn fired a ball across goal, only for Danny Drinkwater to throw his body in the way before Orjan Nyland could pick it up.
As expected, the hosts continued to press heavily throughout the second half, coming close on multiple occasions by way of crosses and set pieces, but it was the visitors who carved out the best chances in open play. Drinkwater and Ince teamed up almost 10 minutes into the half and the Stoke City loanee drove from deep inside the Royals half into the Sheffield United penalty area, only for his cross to be hit too heavily and evade the onrushing calvary.
Ejaria had a penalty claim waved away but Rahman was fouled shortly after, forcing a free kick from which Joao almost doubled his tally. Ejaria, Laurent and Ince teamed up again as the ball went from left to right, only for Yiadom’s cross to miss the players running into the box toward the far post.
The Blades pressed hard in the remaining 20 minutes, but the frustration of the crowd continued to show and those from Yorkshire were just missing the edge that had lead them into the top six from the bottom half when a managerial change was implemented.
Academy product Daniel Jebbison came close for the hosts in the final few minutes, firing a free header over the bar into the Kop, and John Egan fired his header straught at Nyland.
That was until the 89th minute, when Ndiaye was played though and coolly slots an side-foot finish past the Norway international.
However, most vulnerable having just conceded, the Royals immediately struck back and took the lead in stoppage time through Academy gradute Tom McIntyre, in front of the travelling supporters.
The win lifted Reading nine points clear of relegation, with four games remaining.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here