Brighton took the lead at the Emirates Stadium when Leandro Trossard turned home a low cross from Enock Mwepu to finish a good move from the visitors.
Arsenal had struggled to create chances but thought they had levelled through a close-range effort from Gabriel Martinelli, only for a lengthy VAR check to cancel out his header.
Brighton doubled their lead through Mwepu’s low drive from the edge of the box following a neat interchange between Trossard and Moises Caicedo.
Arsenal gave themselves hope of salvaging a result as Martin Odegaard’s speculative effort looped up off Danny Welbeck to half the arrears.
The result is a huge blow for Arsenal's Champions League hopes an they have now lost two on the bounce following their 3-0 loss at Crystal Palace last Monday.
For Brighton it was their first win since their 2-0 triumph at Watford way back in February. The win lifts them to 11th in the league standings and in with a chance of achieving their aim of a top 10 finish.
Sonny Turner was at the Emirates Stadium for Sussex World and here's his player ratings
1. Robert Sanchez- 7
Was unlucky not to keep a clean sheet, making a fantastic diving save to keep out a Martin Odegaard free kick just moments before the Arsenal player looped the ball over him. Did well in claiming crosses to relieve pressure for the visitors.
2. Marc Cucurella- 7
In the thick of the action all game, doing nothing to endear himself to the Arsenal support. Showed a fighting spirit throughout the game, and boundless energy to cover the left flank. His best moment came when flicking away a cross to prevent Alexandre Lacazette from a free header at the back post.
3. Lewis Dunk- 8
Controlled the Brighton defence, dealing with Lacazette comfortably all game, and threw himself in front of everything. Made a great block lunging in front of Smith Rowe who struck from just yards out to prevent Arsenal taking the lead, and hit a pin-point diagonal long ball to Mwepu, which set up the Brighton opener.
4. Joel Veltman- 8
Like Dunk, threw himself in front of everything Arsenal had to offer, making two standout blocks, one to prevent a dangerous cross from Xhaka who had burst down the left in the first half, the second inside the area, preventing a goal bound Saka effort.