Maxence Lacroix was the villain for Crystal Palace as he scored an own-goal, then missed the crucial penalty to earn Arsenal a Carabao Cup semi-final spot after a dramatic tie that went to spot kicks.
An eventful conclusion to normal time saw Arsenal - frustrated for so long after Walter Benitez made seven stunning saves to keep them out - go ahead when Lacroix deflected in Jurrien Timber's shot from a corner - but Palace were not done.
Marc Guehi struck in the fifth minute of stoppage time to silence the Emirates and force penalties - which ended up being a masterclass from the spot.
There were 15 perfect penalties until Lacroix strolled up - only for Kepa Arrizabalaga to keep him out in only his fourth match for Arsenal.
The result means the Gunners will meet Chelsea in the two-legged Carabao Cup semi-finals, which begin on January 13.
Mikel Arteta made eight changes to his Premier League side but his much-changed attack was met by a brick wall in Palace's shot stopper Benitez.
Noni Madueke saw three efforts on goal saved by the Argentine shot stopper - but his best save of the game came to deny a close-range header by Gabriel Jesus - making his first Arsenal start in 345 days after injury.
Gabriel Martinelli was the source of much of Arsenal's attacking joy, bursting constantly past wing-back Jaydee Canvot who was forced off at half-time.
Palace improved after the break with Jefferson Lerma and Adam Wharton firing good chances wide against a frustrated Arsenal, who saw Martinelli coming off at the hour after failing to shake off a first-half knock.
But when Jesus saw one header fly wide and another curling effort palmed over by Benitez, Arsenal eventually got the luck their pressure deserved against a resilient Palace side, who also had Chris Richards stretchered off before the winner.
Timber prodded Saka's corner goalwards and it took two deflections before nestling into the net- but Palace would bounce back with a set piece of their own.
Adam Wharton's free-kick was put back by Jefferson Lerma and Guehi put the ball inbetween Kepa's legs.
Arsenal could have won it when Timber got a good chance at goal but Benitez's seventh save of the match kept the scores level for penalties - where Kepa was the hero
Arsenal manager Mikel Arteta:
"I'm really happy considering the amount of changes that were done, the cohesion and the energy and the quality that the team showed against a team that is very, very well organised and concedes very few chances. We generated a lot.
"The margin should have been much bigger after 94 minutes. They weren't and when that happens, the teams have the quality to help you in any set-piece and we conceded the goal.
"That was emotionally tough to accept after the way the game went, but I think we stayed calm. We showed great composure and quality in the penalty shoot-out"
Your Site' Sam Blitz at the Emirates Stadium:
"It's something we have to improve," said Kepa. "We have been conceding in the last minute."
Brian Brobbey at Sunderland. Emiliano Buendia at Aston Villa. Toru Arokodare against Wolves and now Marc Guehi versus Crystal Palace. Four late goals conceded should concern Mikel Arteta.
What is troubling is that all four goals have involved crosses - and the shots came from the middle of the penalty area - the zone of the pitch where most teams defend first, then deal with the rest later.
Yet Arsenal - normally a duel-winning, defensive solid outlet - are growing a trend. Even in the 1-0 win over Everton at the weekend, there was fortune in VAR not punishing William Saliiba for conceding a penalty.
Arsenal have edged on slowly in the last two results - controlling games but running the risk too much. A lack of cohesion in defence through injuries - Piero Hincapie the latest to be injured - could explain it. So could the tough festive schedule adding load to those already covering others.
Arteta calls for bigger margins and more firepower - Gabriel Jesus is back and Kai Havertz is not far away - could add more goals to ease the nerves. But Arteta has a growing issue - and it's not just injuries.
Crystal Palace boss Oliver Glasner to Your Site:
"Second half, proud. Really great goalkeeper, who kept us in the game but in the second half I saw a different team.
"Coming back here was really great. I don't know if I've seen a shoot-out where all the penalties are taken so well.
"We have to build on the second half performance, everyone is telling us we have fatigue but if you can switch and play like we did in the second half at the Emirates, it's very positive.
"We were braver and much more aggressive. We played more in their half. It was much better than the first half, we were too passive.
"It is not easy to play here against Arsenal. What we have shown in the second half was really good."
With their place in the Carabao Cup semi-finals confirmed, Arsenal are set for a busy start to 2026!
They are set to play every three to four days across the Premier League, FA Cup, Carabao Cup and Champions League...
Saturday January 3: Bournemouth (A) - Premier League, kick-off 5.30pm, live on Your Site
Thursday January 8: Liverpool (H) - Premier League, kick-off 8pm, live on Your Site
Sunday January 11: Portsmouth (A) - FA Cup third round, kick-off 2pm
Wednesday January 14: Chelsea (A) - Carabao Cup semi-final first leg, kick-off 8pm, live on Your Site
Saturday January 17: Nottingham Forest (A) - Premier League, kick-off 5.30pm
Tuesday January 20: Inter Milan (A) - Champions League, kick-off 8pm
Sunday January 25: Man Utd (H) - Premier League, kick-off 4.30pm, live on Your Site
Wednesday January 28: Kairat (H) - Champions League, kick-off 8pm, live on Your Site
Saturday January 31: Leeds (A) - Premier League, kick-off 3pm
Tuesday February 3: Chelsea (H) - Carabao Cup semi-final second leg, kick-off 8pm, live on Your Site
Saturday February 7: Sunderland (H) - Premier League, kick-off 3pm
Thursday February 12: Brentford (A) - Premier League, kick-off 8pm
