City drew for the third time in five games in defence of their Premier League title.
The champions led thanks to a first half header from Joleon Lescott but a late Laurent Koscielny effort levelled the contest.
This was the first meeting of the season between sides widely expected to be in the hunt for the title and it didn't disappoint.
City, after the late surrender of two goals and three points in Madrid's Bernabeu were in were in no mood to give up their 31 match unbeaten run at home -- a sequence that had previously seen them clock up 29 wins and two draws with Fulham and Sunderland.
But, having arrived at the game with differing midweek fortunes in the Uefa Champions League, this was a chance for both sides to put down a marker for the rest of the campaign.
The stats favoured City. Arsenal journeyed to Manchester having failed to score in five of their last seven matches against the Blues in all competitions and having tasted defeat on four of their previous five visits to the Etihad.
However, matches are not won on statisticians' computers and this was a tough contest for both teams.
City were pleased to welcome back last season's top scorer Sergio Aguero who started for the first time since injuring his knee on the opening day win over Southampton.
He was paired up front with Edin Dzeko as Carlos Tevez was left on the bench to rest limbs after a tireless shift in Madrid.
That was a bit of a shock as Tevez and Aguero are a dynamic duo that had helped City win every previous game in which they had been harnessed in attack.
Roberto Mancini restored Joleon Lescott to the heart of the back four and brought in Scott Sinclair in the Samir Nasri (injured) role to help unpick the Gunners rearguard.
This was, though, a different Arsenal side to the past couple of years they had pace, power and panache at their disposal and dominated the centre of the field for much of the first half. They could consider themselves to be slightly unfortunate to be behind at the break.
Premier League facts and figures showed that that Arsenal new boy Santi Cazorla had created more scoring chances for teammates from open play (14) than any other player before this weekend and it was easy to see why. He found more space than the Blues would have liked in the opening 45 minutes.
Having said that it was Arsenal's goalkeeper Vito Mannone who was the busier of the two custodians; saving low down from Aguero and spectacularly tipping a Dezko effort over the bar.
Mancini had seen enough in the first half to be concerned as shown by the removal of Scott Sinclair, who showed some fine touches, and the addition of Jack Rodwell to stiffen up the central area and level out the battle.
Chances were at a premium in the second half which was evenly contested. Aguero thought he should have had a penalty and he might have done had he gone down and not got a shot in -- from the spot he scored the winner against QPR last May.
Hart's handling remained first class as the rain fell in the second period and in front of him it was a more assured performance from the back four. Aguero might have settled things in the 80th minute but Mannone saved low down at the expense of a corner and that led to a nervy finale in which the Gunners snatched an equaliser.
Hart saved brilliantly from Cazorla but the resulting corner wasn't cleared and Koscielny gleefully poked home a goal that Arsenal had been threatening all match.
Even then both sides could have won the game Aguero going closest for City.
Sunday 23 September 2012, 4:00PM
Etihad Stadium Att:47,318
Barclays Premier League
Mike Dean (Merseyside)
Hart, Zabaleta, Kompany, Lescott, Clichy, Yaya Toure, Garcia, Sinclair (Rodwell 46mins), Silva, Dzeko (Tevez 68mins), Aguero (Balotelli 85mins)
Pantilimon, Kolarov, Nastasic, and Barry
Garcia (90 +2)
Mannone, Diaby (Giroud 71mins), Mertesacker, Koscielny, Gibbs, Arteta, Ramsey, Cazorla, Jenkinson, Gervinho (Coquelin 90mins), Podolski (Walcott 71mins)
Martinez, Santos, Oxlade-Chamberlain, and Djourou