The Gunners failed to clinch a spot in the knockout round as they saw a three-goal lead evaporate in the second half.
Arsenal spurned the chance to progress to the UEFA Champions League knockout stage Tuesday after being held to a 3-3 draw by Anderlecht.
Requiring a win for Group D rival Borussia Dortmund over Galatasaray — which the Bundesliga side duly delivered 4-1 — or a draw at Signal Iduna Park, Arsenal threw away a three-goal lead at the Emirates Stadium.
After a positive Arsenal start, a foul on Danny Welbeck in the penalty area allowed captain Mikel Arteta to open the scoring from the spot 24 minutes in.
And Arsenal was two to the good before the half-hour as Alexis Sanchez lashed past Silvio Proto after his initial free kick was blocked.
Alex Oxlade-Chamberlain's strong run and finish made it three before the hour mark before things went downhill for the hosts.
Anthony Vanden Borre's double inside 12 second-half minutes setting the wheels in motion. Aleksandar Mitrovic then had the final say in the 90th minute as Besnik Hasi's side denied Arsenal a place in the knockout stage for a 15th consecutive season — for the time being at least — and kept its own slim hopes of progression alive.
Anderlecht almost opened the scoring after eight minutes when Dennis Praet's effort deflected off Per Mertesacker and into the side-netting, but the hosts responded as the returning Aaron Ramsey — in for Mathieu Flamini — saw a strike blocked and Alexis struck a post before Chancel Mbemba clumsily brought down Welbeck, having found himself on the wrong side of the Arsenal man.
Skipper Arteta calmly lofted the ball past opposing captain Proto to give Wenger's side the lead and Sanchez made it 2-0 with a fifth goal in his last three games soon after.
The former Barcelona man's long-range strike beat Proto at the near post to leave the visitors in real danger despite their relatively positive start.
Arsenal's dream half ended with a scare as Ramsey suffered a knock to his lower back, but the Welshman emerged apparently unscathed after the interval.
Oxlade-Chamberlain made it three soon after with his first European goal of the season, following some slack play from Sacha Kljestan in midfield.
The England international robbed the American and surged past Vanden Borre before slamming the ball past Proto, although the experienced fullback then did his best to sour things for Arsenal as he hit back within three minutes from close range.
The 27-year-old was on the end of Andy Kawaya's delivery to pull a goal back for the visitors before reducing the deficit to one goal from the spot following Nacho Monreal's foul on Mitrovic.
And Mitrovic proved to be Anderlecht's hero, capping a remarkable comeback by heading home Andy Najar's delivery to salvage Anderlecht's second point of the group and gain some revenge for Arsenal's last-gasp 2-1 win in Brussels.