The pedestrians, believed to be a couple, were on the pavement on Caversham Road when they were hit by a car that came off the road and mounted the pavement.
The road has been closed to through traffic as police accident investigators examine the scene and recover debris from the stricken silver grey Vauxhall car.
It was believed that two cars were driving from the direction of the TGI Friday restaurant when the collision occurred.
Bobby Sidhu from a nearby convenience store ran out to help the two injured lying on the pavement.
He said: "I had customers in the shop and the bang was like nothing I had heard before. The walls were vibrating - it shook me on my feet and it sounded like a war.
"I went out to see if I could help and people were giving the man and the woman water and just trying to help them."
The two injured were believed to have been either at the bus stop or just walking along the street when the collision happened.
When emergency services arrived the injured woman was in the front garden of the house and the man was lying in the road.
Nearby neighbours heard a deafening bang at around 9pm to find the car had come to rest in the front garden of a three storey house.
One man said: "It is just unbelievable. It could be you or I walking up or down here. I saw two people lying on the floor being treated by paramedics."
Four police cars and two ambulances were on the scene as well as fire crews from Reading.
Caversham Road is now closed between the Crown Plaza and TGI Fridays due to a road traffic accident which 2 Reading appliances are attending
— RBFRS (@RBFRSofficial) December 27, 2014
A Reading Borough Council bin and a ladies high heeled ankle-boot were catapulted 20 metres from the place where the car came to a stop.
A spokesperson from South Central Ambulance Service said a man in his twenties was taken to the Royal Berkshire Hospital with head injuries and a woman with multiple injuries was taken to the John Radcliffe Hospital with severe head injuries in a life threatening condition.
One witness said the driver called the emergency services and stayed at the scene until police arrived.
Traffic collision investigators were set to be at the scene for several hours to investigate exactly what happened.
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