Cesc Fabregas scored the only goal in the game in the 81st minute to secure all three points for the Gunners.
A warm and sunny day in North London saw and equally bright starts for both Arsenal and Manchester City began the encounter positively in an attack-minded mood.
Robin Van Persie had Arsenal's first notable effort on four minutes when a shot from 25 yards fizzed just over Kasper Schmeichel's bar.
City were playing well on the counter-attack and a promising break on ten minutes ended up with Martin Petrov firing a shot from the edge of the box narrowly wide of the left upright.
Arsenal had to re-adjust on 19 minutes when the injured Bacary Sagna was replaced by Denilson, with Mathieu Flamini switching from midfield to right-back.
With Gilberto already playing in an unaccustomed centre-back role, Arsenal's defence, had a makeshift look about it. Manchester City may have had that as the source of their expansive thinking.
They came close to a break-though on 22 minutes when Elano was put through on goal by Emile Mpenza, but his well-struck effort from just inside the area was well claimed by Manuel Almunia.
Arsenal's best opportunity of the first half came on 38 minutes and was as a consequence of lighting fast passing and intelligent movement. Emmanuel Adebayor received possession on the right side of the area from Fabregas, who then took a return ball on the overlap to drill in a low cross that had all the Manchester City defence and keeper beaten.
Unfortunately for the Gunners, the ball was just too quick for Van Persie who was millimetres away from connecting as he slid in on the far post.
Within five minutes it was Van Persie driving in a cross from the right. Again, City were all beaten and once again, an Arsenal striker, Adebayor this time, could not get toe to ball.
Cracks were beginning to appear in the visitors defence and the half-time whistle came just in time.
The Gunners began where they finished after the re-start, with Adebayor firing just wide of the left post with Schmeichel desperately scrambling across goal.
Petrov went close again for the visitors on 57 minutes when he was left unmarked on the left flank. The Bulgarian fired a well struck drive across goal that flashed past Almunia and his left post.
The Gunners keeper was on hand five minutes later to come out bravely to save an Mpenza shot from point-blank range.
At the other end the Gunners couldn't quite find a clinical finish. Adebayor's back-heeled effort bounced wide on 64 minutes. A minute later Micah Richards hauled down Alex Hleb on the right side of the area and after a brief exchange of glances with his assistant he pointed to the spot.
Even then, Arsenal could not find the net. Van Persie's penalty kick was a poor one allowing Schmeichel to save with his legs. The City keeper, then made two fine saves within a minute, one from a Van Persie shot and then palming over a 25-yard Fabregas effort.
It was the young Spaniard who did eventually make the breakthrough on 81 minutes. He exchanged passes on the edge of the area with Flamini before firing high into the net from five yards out to be the first payer to score past the City keeper this season.
The youngster did well to keep Arsenal's lead to a single goal with a great save from Tomas Rosicky with Hleb firing the rebound wide.
The young keeper even had a header on target as he went up to meet a corner in a bid to secure his side a point.
But, the Gunners held out to continue their own unbeaten run and climb up the table.