Reading responded to a fourth successive loss by firing manager Brian McDermott in a late attempt to avoid relegation from the Premier League.
A 2-1 collapse at home to relegation rival Aston Villa on Saturday left Reading four points from safety with nine matches remaining.
Next from last in the standings, the Russian-owned team is only off the bottom because Queens Park Rangers has scored fewer goals.
“In our current situation, owner Anton Zingarevich felt that a (managerial) change was necessary,” Reading said in a statement on Monday.
The 51-year-old McDermott had been in charge since 2009 and took the team into the top flight for the start of this season for only the second time in its 142-year history.
But the team is at risk of dropping out of the Premier League after only one season and missing out on sharing the wealth from a new TV deal worth about $US8 billion ($A7.88 billion) across three years from August.
Reading, which is based west of London, is yet to replace McDermott, the winner of the Premier League manager of the month award in January.
“The search for a successor will start immediately, and it is hoped that a new manager will be in place as soon as possible to lead the fight against potential relegation,” Reading said.
Bookmakers installed former Lazio and Juventus striker Paolo Di Canio, who left Swindon last month, as the favourite to succeed McDermott.
McDermott, a former Arsenal midfielder, has been part of the backroom staff at Reading since 2000. After taking temporary control of the team in December 2009 he was given the job on a full-time basis a month later.
Unlike relegation rival QPR, Reading failed to invest heavily in the January transfer window.
McDermott’s final match on Saturday saw his players surrender the lead to lose 2-1 at home to fellow struggler Aston Villa.
Reading’s next two games are against leader Manchester United on Saturday and fifth-place Arsenal.
“What we need to do is work hard and try and keep Reading in the Premier League, because that is the goal,” striker Jason Roberts told Sky Sports TV.
