It put Palace back on track after they lost for the first time in seven games on Saturday, going down 3-0 to Doncaster.
Palace took the lead early, saw Reading equalise, but hit back with two more first-half goals to grab victory despite a late Reading goal. The result was sealed with a fourth Palace goal two minutes from time.
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The Londoners took the lead in the seventh minute with the simplest of goals. Full-back Nathaniel Clyne ran forward unchallenged and from twenty yards unleashed a shot that seemed to catch Reading keeper Adam Federici by surprise.
Four minutes later Reading were screaming for a penalty as Jay Tabb's cross struck Danny Butterfield on the arm, but referee Kevin Friend waved their claims away.
Reading missed a great chance to equalise when Tabb sent a cross to the feet of Grzegorz Rasiak but the Royals' leading scorer totally miskicked from close range and the chance was lost.
The Royals skipper Ivar Ingimarsson then put a header just wide from Jobi McAnuff's corner before it was Palace's turn to threaten again.
Victor Moses ended a dash down the left wing with a superb cross, but Neil Dann's header was straight at Federici.
Reading's equaliser was just as simple as the Palace opener, with centre-back Alex Pearce unmarked as he headed in McAnuff's corner after 31 minutes.
Moses then sent the ball high over the bar with a snap shot as the first half wound down and immediately sent another effort thudding into Federica's stomach.
As the game moved into first-half injury time Palace hit Reading with a double blow that effectively won them the game. Darren Ambrose took advantage of an error by Ryan Bertrand to fire a shot past Federici, then Victor Moses became the third Palace player to score from a long-range effort as Federici watched helplessly.
Reading were given some hope when Icelandic midfielder Gylfi Sigurdsson scored their second goal from the penalty spot but a second goal from Victor Moses settled the game in Palace's favour.