The Highlanders were woeful in the first 40 minutes but after a stripping down by the coaching staff at the break, they scored 33 points in the second half to almost win the game.
A penalty goal attempt from Israel Dagg from 55m was the last act of the game.
If it had gone over it would have given the Highlanders the win.
But it did not, and once again it was a case of so close, yet so far for the Highlanders, with the home side winning 38-36.
The Highlanders scored five tries in the second half, and were ahead midway through the second half as the home side completely went off the boil.
But the Reds had owned the first half, scoring four tries and running amok.
The Reds had two-thirds of possession in the opening half and it became the Quade Cooper show.
The gifted first five-eighth ran the ball with aplomb, and found gaps easily in the Highlanders defence.
The Highlanders conceded their first try after just 37 seconds when winger Digby Ioane scored after some soft defence.
In fact, the visitors were lucky to be only down by 24-3 at the break, as they made far too many mistakes.
But they came out a completely different side in the second half, and ran with pace and found plenty of holes in a tiring defence.
Left winger Fetu'u Vainikolo scored two, making the most of the good work inside him.
He scored his first by slugging off three tacklers in a charge to the line from the back of a ruck, and then bagged a second, ending a nice move upfield by the Highlanders, combining backs and forwards.
He should leave those after-try celebrations at home, though.
Prop Chris King and Dagg also crossed, with the fullback's effort coming one minute into the second half, with a nice chip and regather.
Jason Rutledge put the Highlanders back in front 36-31 with eight minutes left with a determined barge at the line.
But they could not hold on, with the Reds swinging on to attack and replacement forward Poutasi Luafutu scoring from an attacking lineout.
Cooper knocked over the handy conversion to put his side back in front with a minute left.
It was tough on the Highlanders to lose after such a gallant fightback but they did nothing in the first half and ultimately paid for it.
Cooper showed how vital it is to have a quality No 10, while Will Genia inside him was all class.
Winger Peter Hynes also looked dangerous throughout.
For the Highlanders, wing Ben Smith was lively and teamed with Dagg and Vainikolo to make up a dangerous back three.
Jimmy Cowan spread the ball well in the second half, while lock Josh Bekhuis became more prominent as the game went on.
Rutledge, who has grown in stature as the weeks went by, continued his ascent while King also had a useful game.
