The 2011-12 champions went into the game six points adrift of Arsene Wenger's league leaders, but moved within striking distance of the London club by claiming the spoils in an enthralling encounter.
Sergio Aguero opened the scoring for City, volleying home from a corner, only for the returning Theo Walcott to level midway through the first half.
Alvaro Negredo turned home Pablo Zabaleta's cross to put the hosts back in front and City looked to have made the game safe when Fernandinho scored his first goal for the club early in the second half.
England winger Walcott curled home a delightful second as Arsenal rallied, yet David Silva converted Jesus Navas' cross to make it 4-2 and Fernandinho struck again in the 88th minute.
An injury-time header from Per Mertesacker provided little consolation for the visitors, particularly as there was still time for Yaya Toure to add City's sixth from the penalty spot.
The hosts started the stronger and were rewarded after 13 minutes when Aguero met Martin Demichelis’ near-post flick-on from a corner with an acrobatic volley that flew past Wojciech Szczesny.
City’s advantage was almost doubled seven minutes later when Negredo shot wide from Vincent Kompany's throughball.
Wenger’s men produced a determined response, Olivier Giroud heading wide before a penalty appeal for handball against Zabaleta went unanswered.
Walcott’s exquisite second provided genuine hope for Arsenal, but City were not to be denied and soon restored their two-goal advantage through Silva.
Jack Wilshere forced Pantilimon into a fine save with a shot from distance, but the midfielder was at fault for City's fifth as he conceded possession to allow Fernandinho to score his second.
