An injury-time winner from rookie striker Neil Mellor sentenced Arsenal to only their second defeat in 55 league games tonight at Anfield.
Chelsea remain five points clear at the top of the Barclays Premiership as injury-ravaged Liverpool produced a victory against all the odds.
Xabi Alonso had given Liverpool the lead in the first half with a fine 20-yard finish but Patrick Vieira scored a superb equaliser, and an absorbing game was heading for a draw until Mellor unleashed the winner.
Vieira went down when challenged by Hamann but there was no contact and the Anfield crowd were furious that referee Wiley did not take stronger action. It looked like a dive and a yellow card would have seen the Gunners captain sent off.
Gerrard forced his way down the left before seeing his shot parried by Lehmann, and then went even closer when Mellor and Nunez had battled to get the ball into the box. The England midfielder latched on to the ball and forced Lehmann into a plunging save to his right.
Six minutes from time Henry was booked for following through to leave Alonso on the floor.
Arsenal's movement was stretching Liverpool in all directions, and Henry almost jinked his way into the box only for Kirkland to snatch the ball off his toes.
But in injury-time Mellor found the energy to lash his 25-yard shot past Lehmann after Kewell had been knocked over trying to reach Kirkland's clearance. The Kop erupted and Liverpool had achieved a famous victory.