Reading made it eight successive league wins to go level with West Ham and boost their automatic promotion hopes.
Mikele Leigertwood sent the Royals on their way with a stunning opener.
Leicester improved after half-time but they wasted a series of chances before Reading extended their advantage with a close-range Jason Roberts strike.
Simon Church added a third with a well-directed header and although Neil Danns pulled a goal back for Leicester in injury time they finished well beaten.
The victory - watched by a near-22,000 crowd - saw Reading climb level with West Ham, who are only narrowly ahead of the Royals on goal difference.
Reading manager Brian McDermott will have high hopes that his side can maintain their promotion challenge and return to the top-flight after a three-season absence.
They started brightly and Foxes keeper Kasper Schmeichel saved from Noel Hunt before Wes Morgan cleared off the line from Hal Robson-Kanu.
Leicester fell behind on the quarter-hour mark when Leigertwood fired the Royals in front with a powerful shot which flew into the top right-hand corner of the net.
The visitors improved after the break when Lloyd Dyer crossed to Danny Drinkwater on the edge of the penalty area, but Drinkwater could not direct his effort on target before David Nugent shot wide after cutting in from the left.
Nugent then headed a Drinkwater corner wide as the Foxes continued to put pressure on Reading.
Reading always looked dangerous on the counter attack and shortly after having appeals for a penalty turned down when Roberts went down in the box, they added a second on 75 minutes.
Hunt charged down the right and picked out Roberts in the box who finished clinically from six yards.
And Hunt was again the provider with a minute left, finding substitute Church to nod home and, although Danns took some of the gloss off the performance with a consolation for Leicester, Reading's promotion push remains firmly on course.
Goal - Neil Danns - Reading 3 - 1 Leicester Neil Danns grabs a goal from just outside the penalty area to the bottom right corner of the goal. Reading 3-1 Leicester.
The ball is delivered by Paul Gallagher, Shaun Cummings manages to make a clearance.
Assist by Noel Hunt.
88:48 Goal scored
Goal - Simon Church - Reading 3 - 0 Leicester Simon Church finds the net with a headed goal from inside the six-yard box. Reading 3-0 Leicester.
Noel Hunt has an effort at goal from just inside the box that misses to the right of the target.
Jobi McAnuff produces a cross, clearance by Souleymane Bamba.
Outswinging corner taken right-footed by Paul Gallagher, Header on goal by Steve Howard from just inside the area goes over the goal.
The offside flag is raised against Hal Robson-Kanu. Kasper Schmeichel takes the indirect free kick.
Substitution Jason Roberts goes off and Simon Church comes on.
Paul Gallagher has an effort at goal from just outside the area which goes wide of the left-hand post.
Corner from the right by-line taken by Paul Gallagher, Alex Pearce makes a clearance.
Inswinging corner taken from the left by-line by Paul Gallagher.
Lloyd Dyer takes a shot. Blocked by Ian Harte.
Noel Hunt concedes a free kick for a foul on Souleymane Bamba. Free kick taken by Kasper Schmeichel.
The ball is crossed by Paul Gallagher, clearance by Alex Pearce.
Assist on the goal came from Noel Hunt.
74:05 Goal scored
Goal - Jason Roberts - Reading 2 - 0 Leicester Jason Roberts gets on the score sheet with a goal from close in to the bottom left corner of the goal. Reading 2-0 Leicester.
Substitution (Leicester) makes a substitution, with Paul Gallagher coming on for Daniel Drinkwater.
Free kick awarded for an unfair challenge on Lloyd Dyer by Hal Robson-Kanu. Free kick taken by Richie Wellens.
Adam Federici takes the free kick.
Booking Booking for Steve Howard.
Free kick awarded for a foul by Steve Howard on Alex Pearce.
Noel Hunt takes a shot. Wes Morgan gets a block in.
Noel Hunt takes a shot. Blocked by Wes Morgan.
Neil Danns delivers the ball, Alex Pearce manages to make a clearance.
Hal Robson-Kanu concedes a free kick for a foul on Lloyd Dyer. Sean St. Ledger restarts play with the free kick.
Centre by Neil Danns, Alex Pearce makes a clearance.
The ball is sent over by Hal Robson-Kanu, Noel Hunt takes a shot. Save made by Kasper Schmeichel.
Neil Danns takes a shot. Save by Adam Federici.
Inswinging corner taken right-footed by Daniel Drinkwater from the left by-line to the near post, clearance by Noel Hunt.
Indirect free kick taken by Kasper Schmeichel.
Booking Mikele Leigertwood goes into the book.
Foul by Mikele Leigertwood on Souleymane Bamba, free kick awarded.
Effort from the edge of the area by David Nugent goes wide of the left-hand upright.
David Nugent produces a right-footed shot from the edge of the box and misses to the left of the target.
Corner taken right-footed by Daniel Drinkwater, Header from close range by David Nugent misses to the right of the goal.
Corner from the left by-line taken by Lloyd Dyer, Header from close range by David Nugent misses to the right of the target.
Lloyd Dyer takes a shot. Blocked by Kaspars Gorkss.
Foul by Jason Roberts on Lloyd Dyer, free kick awarded. Lloyd Dyer restarts play with the free kick.
Richie Wellens takes a shot. Blocked by Jem Karacan. Lee Peltier takes a shot. Blocked by Ian Harte. Corner from right by-line taken by Daniel Drinkwater.
Free kick awarded for a foul by Jem Karacan on Richie Wellens. Direct free kick taken by Wes Morgan.
David Nugent has an effort at goal from the edge of the area that misses to the right of the target.
Free kick awarded for an unfair challenge on Kaspars Gorkss by Steve Howard. Adam Federici takes the indirect free kick.
The ball is crossed by Lloyd Dyer, Effort from the edge of the box by Daniel Drinkwater goes wide of the right-hand upright.
The referee gets the second half underway.
Substitution Souleymane Bamba replaces Tom Kennedy.
Substitution (Leicester) makes a substitution, with Steve Howard coming on for Jermaine Beckford.
45:00 +1:16 Half time
Half Time The first half comes to an end.
The ball is swung over by Jobi McAnuff, Lee Peltier manages to make a clearance.
Jobi McAnuff fouled by Tom Kennedy, the ref awards a free kick. Free kick taken by Ian Harte.
David Nugent takes a shot. Alex Pearce gets a block in.
Neil Danns takes a shot. Adam Federici makes a save.
Mikele Leigertwood challenges Daniel Drinkwater unfairly and gives away a free kick. Tom Kennedy takes the free kick.
The ball is swung over by Shaun Cummings, save by Kasper Schmeichel.
Free kick awarded for an unfair challenge on Jem Karacan by Neil Danns. Ian Harte takes the direct free kick.
Lee Peltier fouled by Hal Robson-Kanu, the ref awards a free kick. Lee Peltier takes the free kick.
Free kick awarded for an unfair challenge on Jason Roberts by Richie Wellens. Free kick taken by Ian Harte.
David Nugent produces a left-footed shot from the edge of the area and misses to the left of the goal.
Unfair challenge on Richie Wellens by Noel Hunt results in a free kick. Sean St. Ledger restarts play with the free kick.
Corner taken by Ian Harte, clearance made by Lee Peltier.
The ball is sent over by Shaun Cummings, clearance by Wes Morgan.
Inswinging corner taken by Tom Kennedy.
Centre by Tom Kennedy, Ian Harte manages to make a clearance.
The assist for the goal came from Jobi McAnuff.
14:36 Goal scored
Goal - Mikele Leigertwood - Reading 1 - 0 Leicester Mikele Leigertwood finds the back of the net with a goal from just outside the box to the top right corner of the goal. Reading 1-0 Leicester.
The ball is delivered by Hal Robson-Kanu.
Tom Kennedy takes a inswinging corner from the right by-line to the near post, Sean St. Ledger has a headed effort at goal from close in which goes wide left of the target.
Neil Danns crosses the ball, clearance made by Kaspars Gorkss.
Tom Kennedy delivers the ball, Adam Federici makes a save.
Foul by Jem Karacan on Richie Wellens, free kick awarded. Direct free kick taken by Sean St. Ledger.
Hal Robson-Kanu has an effort at goal from outside the area which goes wide left of the target.
Noel Hunt takes a shot. Hal Robson-Kanu takes a shot. Kasper Schmeichel makes a save. Corner taken left-footed by Ian Harte, Alex Pearce takes a shot. Save made by Kasper Schmeichel. Save by Kasper Schmeichel.
Lloyd Dyer fouled by Jobi McAnuff, the ref awards a free kick. Tom Kennedy takes the direct free kick.
Richie Wellens has an effort at goal from just outside the box which goes wide of the right-hand post.
Daniel Drinkwater concedes a free kick for a foul on Hal Robson-Kanu. Ian Harte takes the direct free kick.
The ball is sent over by Jobi McAnuff, Wes Morgan makes a clearance.
The game kicks-off.
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