The Reds defended desperately on their own try-line in the final frenetic minutes as New Zealand's Highlanders tried to find an opening.
But as Highlanders skipper and prop Jamie Mackintosh wrestled his way close to the try-line blindside flanker Jake Schatz won a crucial turnover to protect the Reds' lead and keep them in the hunt for the top-six playoffs with their fifth straight win.
The Reds climbed into sixth place ahead of the weekend's remaining games with their Australian derby against the Waratahs in Brisbane next week to decide their play-off fate.
Highlanders, who have a bye in next weekend's final regular round, had to win to keep in the running for the finals but the defeat means their season is now over.
The Highlanders, who were one-time leaders of this year's series, outscored the Reds two tries to one, but it was the goalkicking of centre Mike Harris that proved the difference with a conversion and four penalties from his six attempts.
The Reds, with Wallaby playmaker Quade Cooper playing the entire 80 minutes, looked set for a comfortable victory with a 16-3 lead after prop James Slipper's 57th-minute try.
But the Highlanders hit back with tries from All Black flank Adam Thomson and Chris King, closing to within six points and setting up a tense finish.
"It was very tough and we made it very hard for ourselves at times and credit to the Highlanders, they put a lot of pressure on us with their pick and go," Reds' skipper Will Genia said.
"It's a massive game for us next week against the Waratahs, our season is on the line so we have to prepare as good as we can and put in a good performance next Saturday."
It was a disappointing finish to the season for the Highlanders and their veteran All Black scrumhalf Jimmy Cowan, who is leaving to play in England for Gloucester.
"It was a pretty frustrating way to end the game and we got pretty close and to be involved in that turnover is not good," Mackintosh said.
"We would have loved to
send Jimmy off a winner. He's played 50 games for the All Blacks and 100
for the Highlanders and what a career he's had."
Reds:
15 Luke Morahan, 14 Dom Shipperley, 13 Anthony Faingaa, 12 Mike Harris, 11 Chris F'Sautia, 10 Quade Cooper, 9 Will Genia, 8 Scott Higginbotham, 7 Beau Robinson, 6 Jake Schatz, 5 Adam Wallace-Harrison, 4 Rob Simmons, 3 James Slipper, 2 Saia Faingaa, 1 Greg Holmes.
Substitutes: 16 James Hanson, 17 Ben Daley, 18 Radike Samo, 19 Jarrad Butler, 20 Ben Lucas, 21 Ben Tapuai, 22 Nick Frisby.
Highlanders:
15 Ben Smith, 14 Kade Poki, 13 Siale Piutau, 12 Phil Burleigh, 11 Hosea Gear, 10 Mike Delany, 9 Jimmy Cowan, 8 Nasi Manu, 7 James Haskell, 6 Adam Thomson, 5 Nick Crosswell, 4 Josh Bekhuis, 3 Ma'afu Fia, 2 Andrew Hore, 1 Jamie Mackintosh (captain)
Substitutes: 16 Jason Rutledge, 17 Chris King, 18 Jarrad Hoeata, 19 Tim Boys, 20 Aaron Smith, 21 Chris Noakes, 22 Kenny Lynn