Jaap Stam’s side had won five successive games, but their promotion push suffered a major setback on Saturday.
An own goal from Chris Gunter helped Fulham on their way and there was no looking back once Chris Martin extended the lead.
Danny Williams was then sent off for Reading and it only got worse as goals from Sone Aluko, Stefan Johansen and Martin again made it an afternoon to forget.
Reading headed to west London as the form team of the second tier, but the build-up had been dominated by off-field events.
A takeover which would see a Chinese brother and sister seize control is reported to be close to completion and Stam revealed he feared for his job if the new owners decide to bring in their own man. This will do him no favours.
Stam has implemented an eye-catching passing game, but he would not have wanted Jordan Obita to gift Fulham a chance in the sixth minute.
Obita’s 40-yard free-kick was cut out by Floyd Ayite, who advanced forward before stinging the palms of Reading goalkeeper Ali Al-Habsi. It set the tone.
Reading were constantly playing themselves into trouble and Scott Malone’s cross-shot again forced Al-Habsi into action as Fulham came charging out of the blocks.
It was no surprise when Fulham took a 15th-minute lead, albeit through Gunter’s mistake.
No Fulham player was within yards of Gunter, but he got it all wrong and headed Ryan Fredericks’ cross past his own goalkeeper.
Reading had been uncharacteristically sloppy with and without the ball and the own goal summed up their sluggish start.
David Button in the Fulham goal was a virtual spectator. When Reading did carve out a chance, Roy Beerens delayed his shot and the dominant home side cleared the danger.
Stam would surely have been into his players at half-time, but it not have the desired effect as Fulham extended their lead four minutes after the restart.
Ayite fed Martin and the on-loan striker galloped forward and, as Reading’s defence retreated, fired beyond Al-Habsi from 25 yards out.
Martin should have also been celebrating twice more just two minutes later. First he headed Tom Cairney’s free-kick over from close range.
Then Ayite’s cross found him in space, but he blazed over from 12 yards out.
It went from bad to worse for Reading when Williams saw red for kicking out at Johansen after reacting to the midfielder’s late challenge with 54 minutes on the clock.
Fulham were now in control, but in danger of taking their eye off the ball.
Dominic Samuel bore down on goal, but was denied by Fredericks, while an unmarked George Evans headed straight at Button from close-range.
But it was game over when Aluko cut inside to curle home from the angle in the 68th minute. Despite Reading’s protests that Martin was offside, the goal rightfully stood.
Reading had gone to pieces and within two minutes Johansen strode forward to pile on the misery with a fine finish with the outside of his left foot.
Martin’s late free-kick added the gloss on a nightmare afternoon for Reading.