Match ends, Watford 2, Arsenal 1.
Arsene Wenger bemoaned a "scandalous decision" to award Watford a penalty as Arsenal squandered a lead to lose 2-1 in injury time at Vicarage Road.
The Gunners led through Per Mertesacker's header but the Hornets equalised when Troy Deeney converted from the spot after Hector Bellerin was adjudged to have fouled Richarlison.
Substitute Deeney's strike with 19 minutes left set the scene for a stirring Watford finish, with Tom Cleverley converting in the closing seconds to send Watford fourth.
"I would say it was not a penalty," said Arsenal manager Wenger. "It came at a moment in the game where it was absolutely important for Watford. No penalty, no goal."
Deeney gave a scathing assessment of Wenger's comments and the Gunners in general, telling BT Sport: "I've heard Wenger's already saying the penalty is the reason they lost. Well, I'm not going to be one to tell Mr Wenger about himself, but there's a reason they lost and it wasn't because of one penalty.
"It's having a bit of cojones. Whenever I play against Arsenal, I'll go up and think 'let me whack the first one and see who wants it'.
"I came on today and jumped up with Mertesacker - I didn't even have to jump, actually. I nodded it down, the crowd got up - 'yeah we've got somebody who can win it' - and they all just backed off.
"For me as a player, I just think 'happy days'. That's my strength - if you're going to let me do my strength against you, you're going to have a tough afternoon."
Hornets boss Marco Silva was unhappy with any inference that attacker Richarlison had exaggerated to win the spot-kick that helped turn the game in his side's favour.
"I have seen the penalty and I respect the decision of the referee," he said. "I didn't see a dive or a simulation.
"Richarlison has suffered the most fouls in the Premier League this season, and people are starting to say he dives.
"He is not. He is fair, He wins fouls like the best players in the world win fouls."
Silva's side have now scored in the 90th minute or beyond in three consecutive games, as a second-half revival sealed their first home win of an impressive start to the campaign.
Without the rested Alexis Sanchez the Gunners lacked the cutting edge to capitalise on a string of chances, with substitute Mesut Ozil - short on fitness and also benched - guilty of one glaring miss.
Home comfort return for ambitious Silva
When Silva arrived at Vicarage Road his record in home games was a key strength.
The Portuguese had won many admirers with the way he almost saved Hull City from relegation last season.
But seven games into his Premier League tenure at Watford, it was on the road where his resilient side were making their mark.
All of their wins had come away from Hertfordshire until Saturday, but the optimistic Portuguese may have sensed his luck could change against an Arsenal side without talisman Sanchez and struggling away from Emirates Stadium.
When your side keeps playing for you until the last, you can even afford to be bullish about a zonal marking system that at one point seemed to cause more harm than good. Arsenal threatened from every set-piece as 5ft 9in Cleverley appeared to be marking 6ft 6in Mertesacker.
It let the visitors open the scoring and remained a problem, but afterwards Silva stood by his methods.
"It's not wrong," he said. "It's my decision and we will continue this way. We need to do more but we are strong zonally."
After taking Watford into the Champions League places on a fraction of the budgets elsewhere in the top four, few can argue.
Flaky Gunners still lack nerve
While Wenger complained about the penalty, Arsenal fans might be more concerned with the evidence that their side remain so defensively vulnerable.
Granted they had to ask injury-troubled elder statesman Mertesacker to replace his sidelined compatriot Shkodran Mustafi, but that was not solely to blame.
For 45 minutes at least the 33-year-old German was commanding on his first top-flight start since April 2016.
But worryingly for Arsenal in this contest, they faced only three shots on target and conceded twice.
The panic was palpable in their re-jigged back-line as Watford cranked up that trademark late pressure.
Wenger had readied Jack Wilshire from the bench but brought on another defender, Rob Holding, to cling onto a point. It wasn't enough.
Not for the first time his defence switched off under pressure, leaving Cleverley unmarked to smash in the late heart-breaker.
Injuries can't be helped. Organisation and remaining calm under pressure are another thing.
Man of the match - Heurelho Gomes (Watford)
'The goal remains to stay up' - what they said
Watford manager Marco Silva: "I don't change what I said at the start of the season.
"We have one goal, to remain as a Premier League club. It's too early to change."
Arsenal manager Arsene Wenger: "I think our level dropped in the second half and we missed many chances to kill the game.
"After that, at 1-1, there was no need to panic. I believe that on the second goal we can only look at ourselves."
Watford's best ever start - the stats
- Watford have made their best-ever start to a top-flight season after eight games (15 pts), since their maiden season in the top division in 1982/83 under Graham Taylor (16 pts).
- Arsenal lost to a 90+ minute winner in the Premier League for the first time since January 2012 (Bobby Zamora for Fulham).
- Arsenal scored with the first shot on target of the game.
- Per Mertesacker scored his first Premier League goal in 1400 days, since netting v Man City in December 2013.
- Courtesy of his penalty kick, Troy Deeney ended his longest-ever goal drought in the Premier League (13 games).
- Petr Cech has failed to save any of the last 18 penalties he has faced in the Premier League, last saving one for Chelsea against Fulham in February 2011.
- Deeney's goal was the first Arsenal conceded in the top-flight in 444 minutes of action.
Watford's remarkable run faces one of its biggest challenges yet, as they head to Stamford Bridge to play Chelsea next Saturday (12:30 BST).
Arsenal are in Europa League action on Thursday, when they travel to Serbia to face Red Star Belgrade (18:00 BST).
- 6MariappaSubstituted forCarrilloat 63'minutes
- 27KabaseleBooked at 64mins
- 37PereyraSubstituted forCapoueat 81'minutes
- 18GraySubstituted forDeeneyat 63'minutes
- 6KoscielnySubstituted forHoldingat 85'minutes
- 23WelbeckSubstituted forÖzilat 61'minutes
- 9LacazetteSubstituted forGiroudat 68'minutes
- Neil Swarbrick
- Shots on Target
Second Half ends, Watford 2, Arsenal 1.
Attempt saved. Olivier Giroud (Arsenal) header from the centre of the box is saved in the centre of the goal. Assisted by Mesut Özil.
Goal! Watford 2, Arsenal 1. Tom Cleverley (Watford) right footed shot from the centre of the box to the high centre of the goal.
Attempt blocked. Etienne Capoue (Watford) right footed shot from the centre of the box is blocked.
Attempt missed. José Holebas (Watford) left footed shot from outside the box is close, but misses to the right. Assisted by Abdoulaye Doucouré.
Attempt blocked. Troy Deeney (Watford) right footed shot from the left side of the box is blocked. Assisted by André Carrillo.
Attempt missed. Nacho Monreal (Arsenal) left footed shot from outside the box is high and wide to the left following a corner.
Corner, Arsenal. Conceded by Christian Kabasele.
Attempt missed. André Carrillo (Watford) right footed shot from outside the box is too high. Assisted by Richarlison.
Foul by Olivier Giroud (Arsenal).
Miguel Britos (Watford) wins a free kick in the defensive half.
Substitution, Arsenal. Rob Holding replaces Laurent Koscielny because of an injury.
Per Mertesacker (Arsenal) wins a free kick in the defensive half.
Foul by Richarlison (Watford).
Attempt blocked. Etienne Capoue (Watford) right footed shot from outside the box is blocked. Assisted by Troy Deeney.
Substitution, Watford. Etienne Capoue replaces Roberto Pereyra.
Mesut Özil (Arsenal) wins a free kick in the defensive half.
Foul by José Holebas (Watford).
Laurent Koscielny (Arsenal) wins a free kick in the defensive half.