Reading were granted Academy status by the Football Association in February 1999. The first Academy manager was John Stephenson who oversaw the club's youth development until October 2000 when he left to join Preston North End. He was succeeded by former Reading goalkeeper, and the then goalkeeping coach, Nick Hammond. After his appointment as Reading's first Director of football in September 2003, Hammond combined all three roles until the appointment of Exeter City boss Eamonn Dolan as the new Academy manager in October 2004, a position he still holds.

The Reading reserves competed in the Capital League between 1995 and 1998 before joining The Football Combination which they played in from 1998 until 2006, excluding the 1999–2000 season. With the senior side's promotion to the Premier League in 2006, the reserve team was also promoted to the Premier Reserve League for the 2006–07 season. Under future first-team manager Brian McDermott, the reserves finished top of the Southern section and beat Bolton reserves 2–0 to win the overall title in their first season.