Arsenal Under-21s conceded twice in extra-time as they were beaten 3-1 by Reading in the semi-finals of the Premier League Cup held at Boreham Wood’s Meadow Park.
Isaac Hayden gave the Gunners an early lead from the penalty spot but Craig Tanner headed in an equaliser for the visitors seven minutes before half-time.
Arsenal had chances to win the game in the second period but lacked composure in the final third.
The Gunners started to tire in extra-time and Tanner and Liam Kelly took full advantage to condemn them to defeat.
Arsenal manager Steve Gatting had made four changes to the side that lost to the Royals last month.
Stefan O’Connor replaced Julio Pleguezuelo, whilst Glen Kamara came in for Gedion Zelalem. Hector Bellerin also made the starting line-up.
The Gunners began strongly, with O’Connor meeting a Thomas Eisfeld cross that was cleared off the line by Niall Keown.
Arsenal's opener came after some clever play from Austin Lipman.
The 18-year-old wriggled past two defenders before being fouled in the area to win a penalty. Hayden kept his cool from 12 yards with a powerful side-footed finish.
Arsenal had an opportunity to extend their lead soon after, with Eisfeld firing over from the edge of the box.
However, just before half time a Reading equaliser came out of the blue.
Jack Stacey sent in a cross and Tanner ghosted into the box completely unmarked and diverted past the helpless Matt Macey.
The second half was highly contested, and Macey was on strong form, rebutting Reading attackers with a series of impressive saves.
As the game entered the final 15 minutes, space started to open up for both sides.
Hayden saw two efforts from the edge of the box blocked while Bellerin and Eisfeld both saw dangerous crosses cleared.
The home side had Macey to thank for taking the game to extra time when he pulled off an outstanding save at full stretch to deny Tanner in the dying seconds of stoppage time.
The match went to extra time and Reading took the lead in the 112th minute. A loose through ball looked to be carrying safely through to Macey but he hesitated and Tanner nipped in to prod home.
The tie was put beyond Arsenal at the start of the second period when Kelly headed in Shane Griffin's deep cross.