Reading were formed in February 1871. They were originally nicknamed the The Biscuitmen after one of the main trades in the town, Huntley & Palmers biscuits, but changed to the Royals in the 1970s. The club played at Reading Recreation Ground until 1878, before moving on to Reading Cricket Ground (1878–1882), Coley Park (1882–1889) and Caversham Cricket Ground (1889–1896). The switch to professionalism in 1895 resulted in the need for a bigger ground and, to this end, the club moved again, to the purpose built Elm Park on 5 September 1896.

In 1913 Reading toured Italy and beat Genoa 4-2 and A.C. Milan 5-0, narrowly lost 2-1 to Casale, before beating Italian champions Pro Vercelli 6-0 and the full Italian national team 2-0, prompting the leading sports newspaper Corriere della Sera to write "without doubt, Reading FC are the finest foreign team seen in Italy." Reading were invited back for another tour the following year, but there is no evidence it took place. It is possible it was cancelled due to the imminence of World War I, which claimed the lives of many Reading F.C. players, including Alan Foster, who put a hat-trick past Milan[2].

Reading were elected to the Third Division of the Football League in 1920, and have spent the majority of the time since then in the third tier of the league, with occasional flirtations with the second and fourth tiers.

Reading's best performance in the FA Cup came in 1926-27 when they lost to eventual winners Cardiff City in the semi-final. The side's moment of cup glory came in 1988 when they won the Simod Cup, beating a number of top flight sides en-route to their Wembley win over Luton Town.

Reading were promoted to the Second Division as champions in 1986 under the management of Ian Branfoot, but were relegated back to the Third Division in 1988. Branfoot left in October 1989, having failed to get the Royals back into the Second Division. His successor, Ian Porterfield, lasted just 18 months before further failures cost him his job. The appointment of Mark McGhee as player-manager in June 1991 saw Reading move forward.

In season 1994-95, Reading's play-off defeat against Bolton Wanderers made them the only side to finish second in the First/Second Division and not receive promotion to the top level. This was due to the Premier League reducing its number of teams from 22 to 20. They were crowned champions of the new Division Two in 1994 and, when McGhee moved to Leicester City halfway through the following season, Reading still appeared in with a chance of a second straight promotion. 35-year-old striker Jimmy Quinn was put in charge of the first team alongside midfielder Mick Gooding and guided Reading to runners-up in the final Division One table — only to be denied automatic promotion because of the streamlining of the Premier League. Reading had eased past Tranmere Rovers in the playoff semi-finals and looked to have booked their place in the Premiership after building up a 2-0 lead over Bolton Wanderers by half time in the final. Two late goals from Bolton forced extra time and the match ended 4-3 to Bolton. Quinn and Gooding's contracts were not renewed two years later after Reading had slid into the bottom half of Division One.

Their successor, Terry Bullivant, lasted less than one season before being sacked in March 1998. The Royals finished that season bottom of Division One and slipped into Division Two. Former Celtic boss, Tommy Burns lasted just 18 months before being replaced by Alan Pardew who had previously been reserve team manager before being released. 1998 also saw Reading move into the new 24,200-seat Madejski Stadium — named after chairman John Madejski — in the Smallmead area of the town.

Reading made it back to Division One in 2002 after finishing runners-up in Division Two. Good form the following season saw them finish fourth in Division One and qualify for the playoffs. Their promotion hopes were ended by a defeat against Wolverha