Mistakes from goalkeeper Manuel Almunia and reserve centre-back Sebastien Squillaci handed the relegation threatened Baggies a two-goal lead before Andrei Arshavin and Robin van Persie pegged them back. Despite a late surge from the Gunners, Dimitar Berbatov's goal for Manchester United created more daylight between the sides in the fight for domestic supremacy.
For the Baggies, manager Roy Hodgson made just one change to the side that secured a 3-1 win - his first for the club - against Birmingham City a fortnight ago. Marc Antoine-Fortune was the man to drop out as he made way for top scorer Peter Odemwingie, while skipper Chris Brunt made a late recovery from illness.
Aaron Ramsey made his first start for Arsenal since his horrific leg break more than a year ago as boss Arsene Wenger made three changes to the team that lost 2-0 to United in the FA Cup last weekend. The Welshman, Squillaci and Gael Clichy replaced Abou Diaby, Johan Djourou and the benched Kieran Gibbs.
With the sun on their backs and memories of the result at St. Andrew's coursing through them, West Brom burst out of the traps and deservedly went in front in just the third minute through Steven Reid. In a scene all too reminiscent for long-suffering Arsenal supporters, the Irishman nodded in a Brunt corner unopposed as he exploited the chasm left by the injured Djourou.
Things then almost got immediately worse for the visitors when Odemwingie was just inches away from meeting a low cross from ex-Gunners starlet Jerome Thomas.
With key men, such as Cesc Fabregas, Theo Walcott and Alex Song, missing the Gunners appeared rudderless in the opening stages. The trademark easy-on-the-eye short passing was replaced by aimless long balls over the top to lone striker Robin van Persie that were gobbled up by goalkeeper Scott Carson.
Arsenal were second to every ball in the middle of the park and were saved further embarrassment when Odemwingie was correctly ruled offside in the 17th and 22nd minute when sprung by the dangerous Thomas.
For all the Gunners' shoddy play, their undoubted attacking quality was present in their first meaningful attack of the game in the 25th minute. Clichy stormed down the left flank and picked out Robin van Persie, who hit the bar with a looped header from 15 yards that left Carson rooted to the spot.
As the ball rebounded down, the ex-England international then used all his six foot three inch frame as he smothered Ramsey's shot from point-blank range to keep the Baggies in the lead.
Arsenal finally begin to kick into motion after the half hour mark after James Morrison had been temporarily forced off with a cut. Despite the upturn, it was the Baggies who remained the most threatening outfit before referee Stuart Atwell blew the whistle on a potentially devastating half for Arsenal's title aspirations.
Eager to erase the mistakes of the first-half, Wenger hooked the error-prone Denilson for Marouane Chamakh as he went in search of goals. Despite the change, it was West Brom who first threatened.
A flowing counter attack of which Arsenal would have been proud in the 54th minute saw Brunt slide into the side-netting when he latched onto substitute Marek Cech's low cross on the stretch. The Baggies bench thought it was in but they weren't to be denied for too long.
In another demonstration of Arsenal's crippling defensive fragility, Almunia and Squillaci combined to allow Odemwingie to poke into an open net in the 58th minute. The comical pair dithered under Youssuf Mulumbu's punted clearance on the edge of the penalty area and turned the clearance into an open goal for the appreciative Nigerian.
With their title dreams slipping away by the minute, Wenger finally began to see a reaction from his players. The pair of Chamakh and van Persie were joined by Nicklas Bendtner and the chances started flowing.
After a period of sustained pressure, enigmatic Russian Arshavin gave Arsenal hope with a thunderous goal in the 70th minute. The Russian latched onto a neat pass by Chamakh on the right-hand side of the West Brom box and fired an unstoppable rocket into Carson's far corner.
Arsenal now smelt blood and an equaliser was attained eight minutes later through van Persie. This time it was West Brom's turn for some poor defending.
The move began when the newly-energised Arshavin lofted a deep cross to the back post that was rebounded back into play on the goal-line by Bendtner. The chance seemed to momentarily disappear as the previously solid Abdoulaye Meite collected the ball, but from three yards, the Dutchman tackled the ball into the net as the centre-back dwelt on possession.
Arsenal now threw everything they could at the Baggies. In injury-time, Clichy raced onto a pass and hammered a shot that was expertly tipped round the post by Carson.
From the resultant corner, a scramble saw Brunt up in arms at an apparent dive from Bacary Sagna.
Try as they might, Arsenal couldn't get the winner their push deserved. They had dropped out of three competitions in the previous fortnight; only another collapse from United could prevent a fourth from slipping from their grasp.