Goals from the centre-backs settled the game at the Etihad Stadium as both teams registered their third draw of the season in their fifth match of the campaign so far
The Gunners were the better side in the first half but found themselves 1-0 down at the interval after Joleon Lescott headed the hosts into the lead.
City became the dominant force after the break but conceded an 85th minute equaliser after Laurent Koscielny rifled home from just inside the box.
The result extends City and Arsenal's unbeaten start to the season, with both clubs having now drawn three games out of their opening five top flight fixtures.
Roberto Mancini recalled Sergio Aguero to the City starting line-up at the expense of Carlos Tevez while Koscielny made his first start of the season for the visitors with captain Thomas Vermaelen ruled out by illness.
Though Aguero tested Vito Mannone from distance early on, it was Arsenal who enjoyed the better start to the game with Gervinho let down by a heavy touch when fed through on goal by Aaron Ramsey.
Good work by Carl Jenkinson on the right byline saw the full-back outmuscle Lescott and cut the ball back for Lukas Podolski but the German could only sky wildly over the bar.
Gervinho lashed into the side-netting as Arsenal looked to capitalise on their early dominance but it was the hosts who broke the deadlock, with Lescott powering home a header after some questionable goalkeeping by Mannone from David Silva's inswinging corner.
As the first half drew to a close Mannone went close to making amends by tipping Edin Dzeko's fierce drive over the bar as City came close to doubling their lead.
Mancini replaced home debutant Scott Sinclair with Jack Rodwell at the start of the second half as City went on to negate Arsenal's early momentum.
Aguero was given an abundance of time at the far post before firing over when a ball back into the danger area may have been a more prudent option, while the Argentine was also denied a penalty after a collision with Koscielny in the box.
Arsenal began to look ragged in possession in their rare forays forward and Wenger sent on Olivier Giroud and Theo Walcott, while Mancini replaced Dzeko with Tevez with 20 minutes to go.
A powerful Yaya Toure drive right through the heart of the Gunners' midfield ended up with Aguero forcing Mannone into a near-post save before counterpart Joe Hart parried a Santi Cazorla shot from just outside the box over the crossbar.
The diminutive Spaniard swung in the subsequent corner and the ball broke to Koscielny, with the Frenchman taking a touch before rifling an equaliser into the top corner.
Vincent Kompany went close to restoring the hosts' lead with five minutes remaining, improvising excellently to chest down and fire in a bicycle kick which Mannone saved, before Aguero could only guide Koscielny's subsequent poor clearance agonisingly wide of the post.
Gervinho almost snatched a late winner for the Gunners but after sidestepping well the Ivorian could only fire rashly over the bar as the spoils were shared at the Etihad.