Thierry Henry's hat-trick put Arsenal seven points clear at top of the table.
Liverpool threatened to increase Arsenal's misery after the FA Cup and Champions League exits when Sami Hyypia headed them ahead after five minutes.
Henry raced clear to equalise after 31 minutes, but Michael Owen restored Liverpool's lead before half-time.
Arsenal scored twice in a minute early in the second half through Robert Pires and an Henry wonder goal, before he completed his treble after 78 minutes.
Henry passed a late fitness test on his back injury as Arsenal attempted to get their season on course after a week of bitter disappointment.
Arsenal delayed their appearance on to the pitch until virtually the last-minute, but it was Liverpool who made the faster start and took the lead after five minutes.
Liverpool forced three quick corners, and when Steven Gerrard re-directed Harry Kewell's delivery, Hyypia scored with a diving header.
Arsenal were stunned and it needed a smart intervention from Sol Campbell to stop Owen reaching John Arne Riise's through ball.
The Gunners finally spluttered into life when Liverpool goalkeeper Jerzy Dudek was forced to produce a fine reaction save from Freddie Ljungberg's angled drive.
Jens Lehmann, the much-criticised Arsenal goalkeeper, was uncertain again when he allowed Owen to reach a though ball ahead of him, and he was fortunate to see the striker's shot drift over the top.
Arsenal were in desperate need of a moment of creation, and they got it after 31 minutes.
5 mins: Sami Hyypia heads Liverpool ahead
31 mins: Thierry Henry equalises for Arsenal
43 mins: Michael Owen puts Liverpool back in front
49 mins: Robert Pires puts Arsenal level again
50 mins: Henry's wonder goal gives Arsenal the lead
78 mins: Henry completed his hat-trick and gets Arsenal's fourth
Gilberto robbed Dietmar Hamann, and when Pires found Henry he provided a composed finish to beat Dudek.
But as Arsenal attempted to settle their nerves, Liverpool struck again three minutes before the interval.
Gerrard's brilliant through ball allowed Owen to cleverly escape the attentions of Campbell, and this time he made no mistake.
It was a pivotal moment in Arsenal's season - and they responded magnificently with two goals in a minute to take the lead.
Henry and Ljungberg combined after 49 minutes to set up Pires for a crisp finish past Dudek.
And then, a minute later, came the latest addition to Henry's catalogue of magical moments that have graced this season.
Henry got possession just inside the Liverpool half before setting off on a dazzling run that left Hamann and Jamie Carragher trailing in his wake before providing the finish the move deserved.
Arsenal were going for the kill, while Liverpool manager Gerard Houllier introduced Milan Baros for the disappointing Emile Heskey in a bid to turn the tide.
Wenger also made a change, sending on Edu for the tiring Pires.
Henry completed his hat-trick to seal a crucial victory, taking advantage of slack marking and Dennis Bergkamp's through ball to bundle home with 12 minutes left.
It was the result Arsenal needed so badly, and left Liverpool still fighting a battle for fourth place.
Arsenal: Lehmann, Lauren, Campbell, Toure, Cole, Ljungberg (Keown 90), Vieira, Silva, Pires (Edu 72), Bergkamp, Henry.
Subs not used: Reyes, Clichy, Shaaban.
Booked: Cole, Vieira, Lauren.
Liverpool: Dudek, Carragher, Hyypia, Biscan, Riise, Diouf (Murphy 85), Hamann, Gerrard, Kewell, Heskey (Baros 66), Owen.
Subs not used: Henchoz, Cheyrou, Luzi Bernardi.
Referee: A Wiley (Staffordshire).