A late flurry of goals from Arsene Wenger's side glossed over a game that was equal until the closing stages, with the England international grabbing a hat-trick
The Gunners took the lead four times during a chaotic match before eventually seeing off the spirited visitors as Walcott made the difference with a finishing masterclass in his preferred role as a central striker. Attention will now turn to whether the Gunners can keep the 23-year-old at the club, with his contract set to expire in the summer and no sign of a breakthrough in talks over a new deal.
Walcott had opened the scoring with a classy finish in the 20th minute but the sides went in level at the break thanks to Demba Ba's deflected free-kick two minutes before half-time.
Alex Oxlade-Chamberlain restored Arsenal's advantage five minutes after the re-start before Sylvain Marveaux tapped home a second equaliser just before the hour mark to the frustration and bemusement of the home crowd.
Lukas Podolski put Arsenal back in the lead from close range, yet his strike was quickly cancelled out as Ba volleyed home his second of the evening.
Then, in the 73rd minute, Walcott spun in the penalty area to slam the ball into the top corner from 12 yards. This time, there was no way back for Newcastle and substitute Olivier Giroud sealed the points with two late goals.
There was still time for Walcott to complete his hat-trick as he danced across the touchline and flicked a delightful finish over Tim Krul to claim the matchball - and give his agent some bargaining power as talks over a new deal continue.
The result lifts Arsenal up to fifth in the Premier League on the back of four wins in a row while Newcastle are on a dismal run having collected just six points from their last 10 matches.
Arsenal came into the game on the back of three league wins in a row and with four days more rest than Newcastle after their Boxing Day clash with West Ham was called off. Arsene Wenger made just one change to the team that beat Wigan, with Laurent Koscielny replacing Per Mertesacker, while Cheikh Tiote and Gabriel Obertan came in for Newcastle.
In a a cagey, one-paced opening period, it was Walcott who provided the spark and energy in Arsenal's play. As his contract stand-off continues heading into the January transfer window, the England international was again selected in his preferred central role - and he made his point to Wenger with the opening goal in the 20th minute.
It was a goal reminiscent of Thierry Henry in his pomp and the Gunners legend was leading the applause as he prepares to re-join the club on loan in January.
Podolski placed the ball into space behind the Newcastle back four and Walcott timed his run to beat the offside trap and spring clear down the inside left channel before opening up his body and placing a clean finish into the bottom corner.
Arsenal were struggling to open up the well-organised visitors but Walcott nearly doubled the lead after skipping past Fabio Coloccini but his left-footed shot was smothered by Newcastle goalkeeper Tim Krul.
Newcastle had already served a couple of warnings as to their threat in the final third before the scoreline was levelled two minutes before the break with a huge slice of fortune.
Ba struck his free-kick with power from 25 yards but Wojciech Szczesny appeared to have it covered before the ball was diverted in via a massive deflection off Jack Wilshere.
Arsenal began the second-half with purpose, Krul keeping out Kieran Gibbs from a tight angle before Oxlade-Chamberlain restored the home side’s lead in the 50th minute. The winger was given far too much room by the Newcastle defence as he collected Santi Cazorla's pass and he fired a low finish into the bottom corner from just outside the penalty area.
Nine minutes later, however, Newcastle were level. Gabriel Obertan danced into the Arsenal penalty area and crossed virtually across the goalline via a Koscielny deflection for Marveaux to tap home as the Gunners defence fell asleep.
Yet sloppy defending was a theme of the evening and Arsenal were back ahead in the 64th minute. Podolski was the eventual goalscorer but the credit belonged to Wilshere, who stormed into the box and clipped a delightful chip that Newcastle failed to handle, the ball bouncing off the crossbar before falling for the German to nod home.
There was more to come. On 69 minutes, Newcastle drew level for the third time as Gibbs once again got sucked in and Ba volleyed Marveaux’s excellent cross into the near post.
Four minutes later, Walcott was too sharp for the Newcastle defence as he spun in the area and fired high into the top corner from 12 yards.
Six minutes from time, Walcott turned provider as he crossed for Giroud to score with a diving header to relax the home crowd and ensure the victory. Three minutes later, the Frenchman scored his second as he collected the ball in the penalty area and smashed his effort past Krul at the near post.
By now, Arsenal’s appetite for goals was insatiable and Walcott crowned his wonderful individual performance in added time. Now the Gunners must do everything in their power to keep him at the club.