The Hatters let a two-goal lead slip in the final 10 minutes as Cambridge came back to earn a point in an incredible second half at Kenilworth Road.
It looked as though the Town were going to earn their third straight victory after goals from Claude Gnakpa and Tom Craddock had put Richard Money's side 2-0 up with 11 minutes to play.
But Cambridge had other ideas and substitute Danny Crow got one back for the visitors a minute after Craddock had doubled the Hatters' lead.
The drama continued to unfold and two minutes later Kevin Pilkington superbly saved Chris Holroyd's penalty after Freddie Murray was adjudged to have fouled Reason in the box.
Following that close-call everyone inside Kenilworth Road assumed that was that but in a frenzied last minute Crow was fouled by Kevin Nicholls in the penalty box after Murray's defensive header had hit his own post.
Referee Naylor awarded the U's a second penalty and Crow made no mistake when rolling the ball past Pilkington to complete a remarkable recovery.
The Hatters started the better of the two sides in the opening half but as the rain desended United appeared to take the sting out of the hosts with both goalkeepers rarely called into action in the first 45 minutes.
It was much the same at the begiining of the second period but gradually the Town began to get on top.
The deadlock was broken on the hour when Gnakpa finished superbly with a first-time side-foot volley past Potter in the Cambridge goal when the Frenchman&nbsp;got across is marker following Nicholls' right-wing free-kick. It was the former Marseille man's first goal for the Hatters this season and his first since the winning goal at Wembley in the Johnstone's Paint Trophy final.
With the Town tails up, it was no suprise when they doubled their lead with 10 minutes left on the clock when Craddock took a pass from Newton to belt the ball past a motionless Potter from 25 yards to send the home fans into raptures.
And at that stage it looked all over.
But within 60 seconds the visitors were back to within a goal of the Hatters as an incredible final 10 minutes began to unfold in sodden conditions.
Robbie Willmott ran through the Town defence to fire a shot goalwards that was saved by a strong hand of Pilkington but substitute Crow was first on the scene to nod the ball into an empty net to reduce arrears.
With the crowd still catching their breath, the U's were given a gilt-edged opportunity to level matters two minutes later when Murray sent Reason tumbling in the penalty area.
Referee Naylor pointed to the spot but Holroyd - the visitors' leading goalcorer - saw his resulting spot-kick saved by Pilkington, diving to his right.
Again, that seemed that with the Town seemingly over the stern Cambridge comeback but Martin Ling's side had other ideas, and two minutes into three added minutes, the referee awarded the visitors their second penalty of the game when Nicholls tripped Crow after Murray's defensive header had come off the inside of the post.
Holroyd shifted penalty responsibilties to Crow who made no mistake&nbsp;sending Pilkingto the wrong way&nbsp;to earn the visitors an unlikely point and&nbsp;with it&nbsp;a modicum of revenge for the Town's 4-3 win back in September.
Matches against Cambridge should carry a health warning.
Result from Kenilworth Road
Luton Town&nbsp;2 (Gnakpa 60, Craddock 79)
Cambridge United 2 (Crow 80, 90 (pen))
90 mins - Incredible. Murray's defensive header comes back off the post&nbsp;with the loose ball seizes by Crow, he's fouled&nbsp;by Nicholls and Crow tucked home the resulting penalty. What a sickener.
90 mins &nbsp;Hatters 2-2 CAMBRIDGE
90 mins - PENALTY TO CAMBRIDGE
90 mins - We've got three additional minutes to see this quite remarkable second half out. Come on! The attendance is 7,458 including 711 shouting for Cambridge.
87 mins - Change for Richard Money as Jake Howells replaces Newton. The Hatters need to settle down and put their foot on the ball in the final two minutes.
85 mins - Good play from Gallen and Newton tee up Nicholls for a shot whistles past Potter's upright and out for a corner.
85 mins - A quite incredible four mintues. After Craddock's stunner Cambridge pull a goal back after Crow heads home into an open goal after Pilkington had superbly kept out Willmott's drive. Then two minutes later Murray upends Reason in the box and referee Naylor awards a penalty which Holroyd sees blocked by Pilkington. Unbelievable stuff!
83 mins - SAVED BY PILKINGTON!
82 mins - PENALTY TO CAMBRIDGE
80 mins &nbsp;GOAL Hatters 2-1 Cambridge
79 mins &nbsp;GOAL! HATTERS 2-0 Cambridge - What a stunner! 2-0. Craddock takes a pass from Newton and fires home a wonderful goal from 25 yards past Potter. Get in!!75 mins - Town change from the visitors as Courtney Pitt and Danny Crow are on for Parkinson and Phillips.
71 mins - Well it should be 2-0 this time as the visitors are let-off the hook big time. McAuley dallies on the ball and his mis-control presents Newton with a simple chance to convert the Town's second but the winger can only shoot disappointingly wide. That was a bad miss.
69 mins - This time Cambridge are indebted to Craddock to keeping the score at 1-0 as the striker somehow gets in the way with an advertent touch to prevent Nicholls' low inswinging corner off the line. Would you believe it?
66 mins - Craddock comes close again this time from another free-kick from Nicholls. Nico whips it in low to near post from the left and the striker gets the faintest of touches to the ball that zooms just over the crossbar. Close.
64 mins - There's a real belief around the ground and that goal has helped to no end. Craddock's confident now and after Cambridge fail to clear a long throw from Asafu-Adjaye, the striker arrows as shot from the left-hand edge of the area into the side netting. Unlucky. He really caught that.
60 mins &nbsp;GOAL! HATTERS 1-0 Cambridge - Gnakpa wins a free-kick down the right flank which Nicholls centres perfectly for the Frenchman to caress past Potter with a side-footed volley finish to send Kenilworth Road bonkers. That's his first since that wonderful winner at Wembley and the Town's tails are well and truly up. Get in!
57 mins - We had the wind at Grays but this week it's the rain at Kenilworth Road. It's bucketing it down. The atmosphere inside the great has gone up a notch though. Especially from the Town faithfull. Come on Luton!
55 mins - Back come the Town and a lovely move between Gallen and Gnakpa releases Craddock but before the striker can get a shot at goal Carden does well to rob the striker of the ball with a perfectly-timed tackle.
54 mins - It is still raining here as Holroyd drags a shot well wide from outside the box.
52 mins - Better play from the Hatters as Nicholls does well to win the ball in the middle of the park which releases Gnakpa to run goalwards. It's a strong a run from the Frenchman and with Gallen to the left of him and&nbsp;Craddock to the right he opts for Craddock. It's a decent first touch from Craddock as he races into the penalty box but Potter is quick to pounce on the ball. That's better.
49 mins - Cambridge have started the brighter of the two teams with Pilkington alert to tip over a Robbie Willmott corner and then Blackett gets in the way of a Holroyd shot from the edge of the area as the Town come under immediate pressure.
46 mins - The Hatters get us underway in the second half and there are no changes to either sides at the interval. COYH!
HALF TIME Luton Town 0-0 Cambridge United - That's half-time as referee Naylor calls time on the first 45 minutes. After a bright start it's all tailed off a bit. Very few clear-cut chances so far but check back in 15 minutes for the second half updates.
44 mins - Controversy? The Hatters players and supporters are up in arms as Wayne Hatswell appears to tugs back Craddock as he looks to run through on goal to take a pass from Newton. The ref's not interested though. Tom would have been clean through...
38 mins - I'm still here, don't worry. Just there hasn't been much to talk about in last five minutes. Potter in the Cambridge goal has got to his feet after receiving a knock to the head following a Nicholl's free-kick but that's about it. Not exicting stuff anymore. Sorry.
33 mins - Still goalless I'm afraid. But the Cambridge press boys aren't that enamoured with the U's' display so far. The Town do look threatening but Potter hasn't been called into any serious action. And neither has Pilkington between the sticks at the other.
25 mins - Yep, I guess I put the mockers on it, the game's gone a bit flat and so has the atmosphere. The Town are still on top but only just.
20 mins - It's been a good game so far, which will probably be the kiss of death but the Hatters are playing some good football with Nicholls and Keane in the middle of the park particularly impressive. COYH!
16 mins - First booking of the afternoon is for Keane as he upends Rory McAuley with a wild challenge after over-running the ball. Moments later Gnakpa is tripped by U's captain and player-assistant manager Paul Carden who also earns&nbsp;a caution from referee Naylor. 1-1 on bookings after 17...
11 mins - First real opportunity for the Town as following a flowing move involving Nicholls and Murray, Blackett heads goalwards from Nicholls' vicious inswinging left-wing corner. A scramble ensues as Potter can't get hold of it with Gallen and Asafu-Adjaye unable to turn the ball home. It's been a bright opening to this game despite the bleak weather...Still 0-0.
7 mins - It's pretty even steven so far but former U Freddie Murray floats a ball towards goal from the left-back position that Keith Keane gets too all alone in the box but the midfielder's header doesn't carry much power and it's a comfortable save for Danny Potter in the visitors' goal.
4 mins - The conditions are getting progressively worse although it's no patch on Grays. The rain is teeming down. A slight breeze is carrying into the press box.
2 mins - First chance inside the first 90 seconds as Jai Reason fires a well-hit shot towards goal for the visitors that has Pilkington in the Town goal scrambling to his left but the ball flashes just wide. Close. 4-3, anyone?
1 min&nbsp; And we're off as Cambridge get us under way kicking towards the Kenny Road end. There's a great atmosphere inside the ground with plenty of fans making the trip from the Abbey in fine voice.
14:55 - The two sides are out on the pitch as steady rain falls on the Kenilworth Road surface. The Hatters in orange shirts, white shorts and orange socks while the visitors are all in sky blue.
14:35 WHITE'S NOT ALRIGHT
Richard Money has revealed that White's omission from the team this afternoon is due a bang on the head sustained in training on Friday.
14:15 ONE CHANGE
Team news - Hatters manager Richard Money makes one change to the side that beat Grays Athletic last weekend with Ed Asafu-Adjaye replacing Alan White. Other than it's as you were with the Town likely to line-up 4-4-2 with Ed at right-back and George Pilkington at the heart of the defence alongside Shane Blackett.
There's one former Hatters in the visitors' squad of 16 with winger Courntney Pitt, who scored the opening goal at the Abbey last September, on the bench for Martin Ling's side.
Luton Town: K. Pilkington, Asafu-Adjaye, Keane, Pilkington, Newton, Nicholls, Craddock, Blackett, Gnakpa, Gallen, Murray.
Substitutes: Burgess, Gore, Howells, Jarvis, Charles.
Cambridge United: Potter, Tonkin, Saah, Hatswell, Parkingon, Holroyd, Willmott, McAuley, Reason, Carden, Phillips.
Substitutes: Coulson, Crow, Ives, Pitt, Walker.
Good afternoon all supporters to lutontown.co.uk to our text updates service as the Hatters look to continue their unbeaten start under manager Richard Money as Cambridge United are in town for another exciting clash in the Blue Square Premier.
Two victories and a draw, seven goals scored, three conceded and two clean sheets isn't a bad start to the new boss' tenure at Kenilworth Road and Money will no doubt be looking for his troops to add Martin Ling's U's as another victim today.
And who would bet against another 4-3 win to the Hatters after last September's real ding-dong at the Abbey Stadium that will go down in the memories of all Town fans? Well, our bookmaker bet365 are giving odds of 100/1 that Money's men can do the business and win by the same scoreline!
Another blustery day and a massive crowd is expected at the famous old groud so stay tuned to your official website this afternoon if you can't make it.
Over the course of the day, and in the run-up to kick-off, be sure to keep an eye on&nbsp;lutontown.co.uk as we'll have team news, minute-by-minute updates, reaction and match action for you. On lutontown.co.uk we'll have all the usual updates keeping you bang up-to-date with all the action - and in a number of ways.
There's none of those boring ball-by-ball "defensive thrown-in taken by Luton left-back" updates as we continue to try and bring you an updated and detailed text commentary. This is a great way to keep in touch and has been popular to those supporters not able to get to a computer or a radio as the service is also available and is updated live on our WAP site.
On Hatters Player you all have access to our live commentary. Simon "Statto" Pitts will be high above the rest with the best view in the house to call home the shots on Player. He's the best in the business and we've got him!
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Enjoy the game.