With Alan Pardew in charge at the club during the 1998-99 season, things did not really get any worse for Reading FC, they finished the season off in a respectable 11th position in the second division. Everything did not go spectacularly well for Reading in the cup competitions, they stumbled out of the FA cup in the third round losing to Stoke City 1-0, their league cup journey was also uneventful, slipping out the competition losing in the second round against Barnsley. Their was a slight improvement on their league finish the following season, they finished the season off in a respectful 10th position, gaining 62 points during their campaign. They were less fortunate once again in the cup competitions, crashing out of the FA cup in the third round, losing 1-0 to Plymouth Argyle. They were eliminated out of the league cup, losing to Bradford City in the second round on the away goals rule.
Pardew led Reading into third position during the 2000-01 season, narrowly missing out on promotion via the play offs, they could not produce their fantastic league achievements in the cup competitions as they suffered heartbreak in the league cup, crashing out in the first round, losing against Leyton Orient. They also suffered an early exit form the FA Cup, crashing out in the second round, losing against Swansea City.
The 2001-02 season proved to be a great success for Pardew and for Reading FC, they went through a splendid run in the league, that eventually saw the club reach second place by the end of the campaign, in turn promoting the club to the first division. Reading FC had less luck in the cup competitions, they crashed out of the FA Cup in the second round, losing 2-0 against York City, they also crashed out of the league cup in the third round, losing 1-0 to premiership outfit, Aston Villa. Their new signing, James Harper, from Cardiff City FC proved to be an instant success at the club.