Arsenal, lifted by Chelsea's defeat at Tottenham Hotspur on Saturday, looked to be coasting to victory through goals by Theo Walcott and Mikael Silvestre either side of half time.
But Ben Watson, Titus Bramble and Charles N'Zogbia struck in quick succession to turn the match on its head and give Wigan their first league victory over Arsene Wenger's side.
"It is the most disappointing defeat of the season and the way we conceded, it was also the most disappointing," Wenger told Sky Sports.
"It is difficult to understand and accept, perhaps the players felt too comfortable but in football you must stay focused for 90 minutes and we were punished. We made mistakes and they took advantage, they were sharper in the final part of the game."
Wigan had already beaten Chelsea and Liverpool at home this season but captain Mario Melchiot said it was his side's biggest victory of the campaign.
"I was so happy when we scored the winner because we needed the points," he said. "It's a very big result, very good for the morale of the team."
The result moved Wigan on to 35 points, seven clear of Hull City, and virtually guaranteed their Premier League survival for another season.
Arsenal, who would have moved to within three points of leaders Chelsea with a win, remained third on 71 points, six behind Chelsea and five adrift of Manchester United with just three matches to play.
In the day's other match Aston Villa won 2-1 at relegated FA Cup finalists Portsmouth and leap-frogged above Liverpool into sixth place, at least until Liverpool play West Ham United on Monday.
Villa, still in the hunt for fourth place which brings with it a chance of Champions League football next season, moved on to 58 points, six behind Spurs (64), who are fourth. Manchester City (62) are fifth.
ALL OVER
Wenger conceded that Arsenal were out of the title race on Wednesday when they lost 2-1 at arch-rivals Tottenham Hotspur but they were handed an unlikely lifeline when Spurs beat Chelsea.
They looked poised to grab it when their depleted team coasted through the first 80 minutes at the DW Stadium without seriously being troubled.
Walcott impishly put the Gunners ahead after 41 minutes, perfecting slotting past Chris Kirkland. Silvestre, replacing the injured Thomas Vermaelen in defence, made it 2-0 from a corner after 48 minutes with his first of the season.
Wigan, who had only sporadically threatened, pulled one back when Arsenal fan Watson scored after 80 minutes to set up what proved to be an astonishing finale and the most unlikely comeback in the Premier League this season.
Bramble made it 2-2 in the 89th minute following a bad mistake by Arsenal reserve goalkeeper Lukasz Fabianski, who was making his first appearance since an error-strewn display in a Champions League match against Porto in February.
N'Zogbia won the match with a superb strike from the edge of the penalty
