Until Monday's 2-1 defeat by Chelsea Roberto Mancini's side appeared all but untouchable at the top but that first reverse has provided a reality check for City and fuelled the belief of the side's trying to keep pace with their lightning start.
Throw in their Champions League exit at the group stage the week before and a number of defensive injuries, the visit of the rejuvenated Gunners will shed more light on the durability of Mancini's expensively assembled machine.
By the time they face Arsenal they could even find themselves displaced from the summit by Manchester United who play at Queens Park Rangers in an earlier kick-off.
City, who have 38 points to United's 36, have looked down on everyone else since mid-October.
Full-back Micah Richards is ready to return after missing the last two matches to ease City's defensive crisis but they will be without Aleksandar Kolarov - sidelined for a month with a groin injury - and Gael Clichy, who will serve a one-match ban against his former club after being sent off in City's defeat at Stamford Bridge.
The match is a key one for both clubs and comes three weeks after a largely shadow City side beat Arsenal 1-0 in a League Cup quarter-final at Emirates Stadium.
BOUNCE BACK
With Richards back after recovering from a calf injury, coach Mancini will be hoping to field his strongest starting line-up against the in-form Gunners who have climbed to fifth (29 points) on the back of seven wins from eight league games.
Mancini was unworried by City's unbeaten run ending.
"After 15 games we are on top, with two more points than United," Mancini said, adding: "We are strong enough to start winning again and one result doesn't change anything.
"We don't have a problem bouncing back," he added, "I am sure we will. At this moment, Arsenal are playing very well, it will be difficult but we need to start again."
RECOVERED WELL
Arsenal, who were 15th nine weeks ago after a poor start, have recovered well and would love nothing better than to repeat last season's 3-0 win at City when Samir Nasri, now of City, scored one of their goals.
Robin van Persie was out injured at the time and did not play, but he has returned to full fitness in style since then, and is currently virtually a one-man attack for the Gunners, and is the League's leading scorer with 15 goals.
Another intriguing London v Manchester confrontation is also taking place on Sunday when QPR face United at Loftus Road.
United, like City, were dumped out of the Champions League last week, and will be seeking to extend their unbeaten League run to seven and build on last week's encouraging 4-1 win over Wolverhampton Wanderers when Nani and Wayne Rooney scored twice each to end long scoring droughts.
QPR have held their own in their first season back in the top flight for 15 years but have struggled at home, win
