The hosts broke the deadlock after 57 minutes when Cameron Pring was fouled on the left touchline and Nathan Baker's header from a Jay Dasilva free-kick found the bottom corner.
But, with the 90 minutes up, City goalkeeper Dan Bentley failed to gather the ball at the feet of Carlos Mendes-Gomes, who crossed from the left bye-line for Hylton to tap the ball into an unguarded net.
It meant City are still without a home win since January, a club record run of 14 games, 11 of them under boss Nigel Pearson.
Luton were forced into a late change, with Kal Naismith promoted from the bench to replace skipper Sonny Bradley at the back.
Both sides attacked effectively in an entertaining first half, without being able to break the deadlock. But it was the visitors who came closest.
City's Pring and Luton's Cameron Jerome had early efforts blocked before Alex Scott badly mistimed a header from a Pring cross.
It was a busy half for home skipper Bentley, whose first important save was from Harry Cornick after 11 minutes.
Han-Noah Massengo and Andreas Weimann had shots blocked during a period of City pressure before Bentley did well to save an effort from distance from Henri Lansbury, with Luke Berry unable to capitalise on the rebound.
Seconds later Pelly-Ruddock Mpanzu rattled the home side's crossbar with a volley. Pearson was moved to make an early change after 37 minutes, sending on Nahki Wells for Scott.
Tomas Kalas sent a sweetly-struck volley wide of a Luton post from the edge of the box before Bentley made a brilliant save to keep out Jerome's shot from 10 yards.
Nathan Jones' team were denied by the woodwork again just before the break, with former Bristol Rovers defender Tom Lockyer shooting against the post from Cornick's cross.
Pearson made another change at the break, replacing right-back Zak Vyner with Dasilva. The substitute lined up left-back, with Baker moving inside and Kalas switching to the right.
Wells was up front alongside Chris Martin, with Weimann moving to the right of midfield.
Baker's goal sent long-suffering City fans into raptures. Luton boss Jones responded by sending on Hylton and Elijah Adebayo for Jerome and Cornick.
The second half lacked the chances created in the opening 45 minutes.
But Luton continued to attack with menace and Bristol City defenders had to put bodies on the line in front of Bentley.
The visitors could not summon up the penetration of the first half and the home keeper was relatively untroubled until that nightmare injury-time moment as the spoils were shared.