With extra time looking almost certain, Ivan Campo and Nicolas Anelka rifled home the goals that put Sam Allardyce's men through to the next round.
Although making six changes from the side that drew with Middlesbrough on Saturday mainly due to injuries, Allardyce still fielded a powerful team.
But League Two high-flyers Walsall were equal to the task and gave as good as they got for most of a pulsating cup tie.
Indeed it was Richard Money's men who were first to go close when striker Martin Butler had a shot on the turn saved by Ian Walker from Ian Roper's downward header.
Wanderers displayed their quality by stroking the ball about well but Walsall always looked dangerous and had the better of the chances.
It was an action packed match and all in the space of a minute midway through the first half Ricardo Vaz Te had two good chances for Bolton and sandwiched in-between Walsall's Chris Westwood chested the ball against the Bolton post.
On the half hour Walsall's Hector Sam headed wide when well placed from a fine cross by Dean Keates who got into the action again four minutes after the interval when his free-kick was well saved by Walker throwing himself high to his left.
Walsall keeper Clayton Ince just about kept out a header from Jaroslaw Fojut in the 53rd minute.
The miss of the match came on 59 minutes when a fine cross by Mark Wright found Butler on the edge of the box but somehow he put the header wide with only Walker to beat.
Allardyce brought on Kevin Nolan in the 59th minute for Andranik Teimourian and ten minutes later Nolan opened the scoring following good work by Abdoulaye Meite and Anelka.
Four minutes later Walsall were back on terms when a great free-kick by Michael Dobson hit the underside of the bar and bounced out for Butler to head home from close range.
It looked anybody's game as Butler had a 78th minute header taken by Walker, but Bolton applied late pressure and Campo forced the ball home from close range following a corner by Gary Speed and Anelka added the finishing touches to another corner this time by Stelios.