Arsenal surrendered a two-goal lead to draw at German side Schalke 04 and leave their Champions League hopes in the balance with two games remaining.
Making only his fourth start of the season, Theo Walcott tapped the Gunners ahead before Olivier Giroud doubled their advantage with a powerful header.
But Klaas-Jan Huntelaar drilled his side back into contention on the stroke of half-time to shift the momentum.
Jefferson Farfan fired an equaliser as Arsenal held on for a point.
Arsenal slip up
This is only the second time Arsenal have squandered a two-goal lead in the Champions League. The first was against Bayern Munich in December 2000
The Gunners had a glorious late chance to snatch all three, but Walcott was denied by Lars Unnerstall when clean through.
It was a fair result and one Arsenal might have settled for before the match, but they will be disappointed to have let slip a two-goal lead and seen Walcott miss that late chance.
Arsene Wenger's men remain second in Group B on seven points, one adrift of Schalke, but victory for Olympiakos over Montpellier moves them on to six points.
The Gunners, who have won just two of their last six matches in all competitions, host Montpellier on 21 November before travelling to Olympiakos on 4 December.
They will be confident of advancing to the knockout stage, but must improve their defensive solidity if they are to do so.
We lacked physical intensity - Arsene Wenger
Wenger's men actually arrived in Germany with more pressing concerns over their attack - they had managed the joint-lowest number of shots on target in the group stage with just 12.
But Walcott was given his first Champions League start since March as part of a three-pronged front line, and the decision paid off.
Arsenal were forced to battle an early bout of pressure as Christian Fuchs saw a shot deflected wide, Ibrahim Afellay drew a fine low save from Vito Mannone and Benedikt Howedes headed over the bar.
Although Wenger dropped the error-prone Andre Santos in favour of Laurent Koscielny and moved Thomas Vermaelen to left-back, his defence still looked shaky in the first 15 minutes.
Yet Schalke's determination to push forward left them vulnerable to counter-attacks, and that duly proved their undoing.
Per Mertesacker's ball upfield was inexplicably headed into the path of Giroud by Roman Neustadter and although the Frenchman hesitated, allowing Howedes to slide in, Walcott arrived to skip past Unnerstall and tap in his 50th goal for the club
The hosts looked stunned by Arsenal's strike against the run of play, and the visitors doubled their advantage when Podolski crossed from the left for an unmarked Giroud to score with a diving header.
Giroud nodded at Unnerstall as Arsenal tried to extend the lead, but they switched off as half-time approached and were punished.
In the second minute of stoppage time, Santi Cazorla lost possession in midfield and Lewis Holtby played Huntelaar in behind Metesacker to drill his finish across Mannone.
The goal lifted Schalke at a critical time and, despite Giroud volleying over the bar when well placed shortly after the break, Huub Stevens' team quickly assumed control.
Jermaine Jones eluded Mertesacker with a pass that put Huntelaar one-on-one with Mannone, but the Italian produced a fine stop with his legs to thwart the Dutchman.
Schalke were now encamped in opposition territory and Marco Hoger's shot was cleared off the line by Mikel Arteta before Mannone saved well from Holtby and Afellay.
The pressure told when Holtby's header from an Afellay cross fell to Farfan at the back post and his drive cannoned in via Vermaelen.
A tiring Arsenal could have won it late on as Walcott escaped Joel Matip, but Unnerstall easily repelled a tame effort with his feet.
Theo Walcott takes a shot. Save by Lars Unnerstall.
90:00 +2:41 Substitution
Substitution Tranquillo Barnetta comes on in place of Lewis Holtby.
Christian Fuchs crosses the ball.
The ball is swung over by Benedikt Howedes.
Substitution Clarindo Andre Santos on for Lukas Podolski.
Substitution Francis Coquelin on for Santi Cazorla.
Effort on goal by Jermaine Jones from just outside the penalty area goes harmlessly over the target.
Klaas-Jan Huntelaar is flagged offside by the assistant referee. Free kick taken by Vito Mannone.
Mikel Arteta fouled by Jermaine Jones, the ref awards a free kick. Mikel Arteta takes the free kick.
Jermaine Jones takes a shot. Vito Mannone makes a comfortable save.
Foul by Thomas Vermaelen on Jefferson Farfan, free kick awarded. Benedikt Howedes takes the direct free kick.
Unfair challenge on Jermaine Jones by Lukas Podolski results in a free kick. Benedikt Howedes takes the free kick.
Direct free kick taken by Mikel Arteta.
Booking Jermaine Jones is cautioned.
Jermaine Jones gives away a free kick for an unfair challenge on Thomas Vermaelen.
A cross is delivered by Benedikt Howedes.
Theo Walcott is flagged offside by the assistant referee. Lars Unnerstall restarts play with the free kick.
Centre by Theo Walcott.
Shot from just outside the box by Santi Cazorla goes over the bar.
Lukas Podolski produces a cross, clearance by Christian Fuchs. Outswinging corner taken right-footed by Santi Cazorla from the right by-line to the near post, Kyriakos Papadopoulos makes a clearance.
Jermaine Jones gives away a free kick for an unfair challenge on Jack Wilshere. Free kick taken by Mikel Arteta.
A cross is delivered by Lewis Holtby.
Assist by Lewis Holtby.
66:32 Goal scored
Goal! - Jefferson Farfan - Schalke 04 2 - 2 Arsenal Jefferson Farfan finds the back of the net with a goal from close range to the bottom right corner of the goal. Schalke 04 2-2 Arsenal.
Substitution Kyriakos Papadopoulos is brought on as a substitute for Marco Hoger.
Ibrahim Afellay takes a shot. Save by Vito Mannone.
Drilled left-footed shot by Lewis Holtby. Save by Vito Mannone.
Booking Caution for Lukas Podolski.
Corner taken by Christian Fuchs. Marco Hoger has an effort at goal from close in which goes wide right of the target. Corner from right by-line taken by Jefferson Farfan.
Foul by Lukas Podolski on Marco Hoger, free kick awarded. Direct free kick taken by Lewis Holtby.
The official flags Theo Walcott offside. Lars Unnerstall takes the indirect free kick.
Jermaine Jones is adjudged to have handled the ball. Vito Mannone takes the free kick.
Roman Neustadter challenges Theo Walcott unfairly and gives away a free kick. Mikel Arteta takes the direct free kick.
Corner taken by Jefferson Farfan played to the near post.
Outswinging corner taken left-footed by Christian Fuchs, Thomas Vermaelen makes a clearance.
The ball is delivered by Klaas-Jan Huntelaar, Mikel Arteta manages to make a clearance.
Jefferson Farfan challenges Santi Cazorla unfairly and gives away a free kick. Direct free kick taken by Santi Cazorla.
Free kick awarded for an unfair challenge on Bacary Sagna by Marco Hoger. Direct free kick taken by Bacary Sagna.
Klaas-Jan Huntelaar takes a shot. Save by Vito Mannone. Corner taken by Jefferson Farfan played to the near post, Lukas Podolski makes a clearance.
The ball is sent over by Lukas Podolski, Effort on goal by Olivier Giroud from inside the area goes harmlessly over the bar.
The match restarts for the second half.
45:00 +2:23 Half time
Half Time The half-time whistle blows.
Assist by Lewis Holtby.
45:00 +1:28 Goal scored
Goal! - Klaas-Jan Huntelaar - Schalke 04 1 - 2 Arsenal Klaas-Jan Huntelaar finds the net with a goal from inside the area to the bottom right corner of the goal. Schalke 04 1-2 Arsenal.
The ball is crossed by Jefferson Farfan, Laurent Koscielny makes a clearance.
Jefferson Farfan crosses the ball, Laurent Koscielny makes a clearance.
Free kick awarded for a foul by Theo Walcott on Christian Fuchs. Christian Fuchs restarts play with the free kick.
The ball is sent over by Marco Hoger, Per Mertesacker manages to make a clearance.
Unfair challenge on Lukas Podolski by Marco Hoger results in a free kick. Santi Cazorla crosses the ball in from the free kick, save made by Lars Unnerstall.
Santi Cazorla delivers the ball, Olivier Giroud takes a shot. Lars Unnerstall makes a comfortable save.
Booking Christian Fuchs is cautioned by the ref for unsporting behaviour.
Theo Walcott fouled by Christian Fuchs, the ref awards a free kick.
Jefferson Farfan has an effort at goal from outside the area which goes wide right of the goal.
Christian Fuchs is ruled offside. Indirect free kick taken by Vito Mannone.
The ball is sent over by Christian Fuchs, clearance made by Thomas Vermaelen.
The ball is sent over by Jefferson Farfan, clearance by Per Mertesacker.
Jefferson Farfan takes a shot. Thomas Vermaelen gets a block in.
The ball is crossed by Bacary Sagna, clearance by Benedikt Howedes.
Centre by Marco Hoger.
Corner taken by Christian Fuchs, clearance by Per Mertesacker.
The referee blows for offside. Lars Unnerstall restarts play with the free kick.
Inswinging corner taken by Lewis Holtby, clearance by Per Mertesacker. Joel Matip has a header from inside the six-yard box and clears the crossbar.
Lukas Podolski provided the assist for the goal.
25:38 Goal scored
Goal! - Olivier Giroud - Schalke 04 0 - 2 Arsenal Olivier Giroud finds the back of the net with a headed goal from inside the six-yard box. Schalke 04 0-2 Arsenal.
The ball is crossed by Lukas Podolski,
Substitution Marco Hoger on for Atsuto Uchida.
Mikel Arteta restarts play with the free kick.
Booking Joel Matip goes into the book.
A cross is delivered by Christian Fuchs, clearance made by Per Mertesacker. Lewis Holtby sends in a cross, Jack Wilshere makes a clearance. Free kick awarded for an unfair challenge on Santi Cazorla by Joel Matip.
Effort from outside the area by Christian Fuchs goes wide right of the goal.
Centre by Jefferson Farfan, Thomas Vermaelen gets a block in. Corner taken by Jefferson Farfan from the right by-line to the near post, Jack Wilshere makes a clearance.
Joel Matip takes the free kick.
Booking Santi Cazorla goes into the referee's book for unsporting behaviour.
The ball is swung over by Santi Cazorla, clearance made by Benedikt Howedes. The referee penalises Santi Cazorla for handball.
Lewis Holtby fouled by Theo Walcott, the ref awards a free kick. The free kick is delivered left-footed by Christian Fuchs from left wing, clearance made by Per Mertesacker.
Olivier Giroud is caught offside. Free kick taken by Benedikt Howedes.
17:36 Goal scored
Goal! - Theo Walcott - Schalke 04 0 - 1 Arsenal Theo Walcott finds the net with a goal from close range low into the middle of the goal. Schalke 04 0-1 Arsenal.
Olivier Giroud takes a shot. Save made by Lars Unnerstall.
Short corner taken by Santi Cazorla. Santi Cazorla takes a outswinging corner from the right by-line played to the near post, Klaas-Jan Huntelaar makes a clearance.
Jefferson Farfan takes a outswinging corner from the right by-line played to the near post, Benedikt Howedes has a header from deep inside the six-yard box and clears the crossbar.
Effort on goal by Ibrahim Afellay from 20 yards. Fantastic save by Vito Mannone.
Christian Fuchs challenges Jack Wilshere unfairly and gives away a free kick. Free kick taken by Mikel Arteta.
Unfair challenge on Theo Walcott by Christian Fuchs results in a free kick. Bacary Sagna restarts play with the free kick.
Shot by Christian Fuchs. Blocked by Laurent Koscielny. Christian Fuchs takes a outswinging corner from the left by-line played to the near post, Lukas Podolski manages to make a clearance. Centre by Christian Fuchs.
Jermaine Jones is caught offside. Vito Mannone takes the free kick.
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