The League One club were 4-1 up with five minutes of the first half left, but Jake Sheppard's header pulled Reading's youngsters back into it in the 68th minute to level the score 4-4.
Noel Mbo made it 5-4 to Gillingham ten minutes from time, before Darren Oldaker created further breathing space with another goal.
However Reading's Adrian Popa made sure of a nervy final few moments for the Gills with his tidy finish two minutes from time narrowing it to 6-5.
Thankfully for Gillingham, Oldaker stepped up and scored his second of the game with a sweetly struck free-kick in the 90th minute to kill off the tie once and for all.
FT: No, you're really not seeing things. The full-time score is Gillingham 7-5 Reading U21! What a game, hosts finally get over the line!November 7, 2017
What. A. Game. Although Gillingham caretaker manager Steve Lovell was not happy to see his youthful line-up concede so many goals.
"I've had a little go at them at the end of the game but they've got to learn," he told KentOnline post-match. "They've got to learn and they will learn. If they don't then they can't be around us for too much longer."
Way to soak up the victory, Steve.
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