The Gunners forfeited the lead in Greece as Giannis Maniatis and Kostas Mitroglou canceled out the Czech's opener, and in the process handed top spot in Group B to Schalke
Tomas Rosicky had put the away side into the lead before second half goals from Giannis Maniatis and Kostas Mitroglou earned the Greek side a surprise victory.
Though a dead rubber for the home side, Leonardo Jardim named a strong side with Superleague top scorer Rafik Djebbour starting up front and Algerian teammate and leading assister Djamel Abdoun in midfield.
With qualification already guaranteed, Wenger made seven changes to the team that lost 2-0 against Swansea at the weekend; Rosicky returned to the side and 20-year-old Jernade Meade was handed his full debut at left back.
Arsenal started well with Gervinho bursting past Kostas Manolas down the left before skewing a shot wide from inside the box. A cute one-two with Rosicky saw the Ivorian play Marouane Chamakh through on goal, but Vassilis Torossidis was able to get back and dispossess the Moroccan.
Olympiakos looked lively down their own left flank through Torossidis and Abdoun; The Greek fullback had a header cleared off the line by Rosicky and Abdoun forced Wojciech Szczesny into a good save either side of a fluffed half-volley from Aaron Ramsey.
The game was increasingly becoming an end-to-end shoot-out with Gervinho especially dangerous on the counter, though his poor decision-making brought several attacks to a premature end.
Eventually the Ivorian got it right, jinking into the box before cutting the ball back to the edge of the area for Rosicky to curl into the far corner via the palms of Roy Carroll just before halftime.
Andrey Arshavin replaced the Czech goalscorer after the break and brought even more speed to Arsenal’s offense on the break. The Russian had a chance to double the lead but headed Chamakh’s cross over the bar from 10-yards.
Olympiakos, playing only for pride, continued to push forward, affording Arsenal space to break into. Abdoun’s neat through-ball was prodded wide by Ljubomir Fejsa before another swift Gunners counter saw Arshavin’s stinging shot clawed away by Carroll.
Drissa Diakite’s floated cross met the head of Paulo Machado, and the Portuguese midfielder’s header was tipped behind by Szczesny (who claimed he had not touched the ball). From the resulting corner, Kostas Manolas’ header ricocheted off the chest of Ramsey and into the path of Maniatis who buried the ball in the back of the net.
The Greek champion pressed for a winner immediately, as Djebbour headed Machado’s cross wide from close range. Substitute Mitroglou was more clinical however, creating a yard of space on the edge of the box before curling a low shot past the outstretched arm of Szczesny and into the bottom corner.
Arsenal struggled to mount a response and rarely troubled Carroll. Rosicky’s creativity was missed in the second half and Olympiakos saw out the match in determined style as the Gunners now pray they avoid the likes of Barcelona or Borussia Dortmund in the next round.