Arsenal lost for the first time this season as Arsene Wenger's side missed the chance to claim top spot in Group H of the Champions League.
Kanoute missed a host of chances before scoring a penalty
Eduardo gave Arsenal an early lead when the he slipped the ball home after he was picked out by Nicklas Bendtner.
But by half-time Sevilla were ahead, Seydou Keita scoring with a superb shot hit with the outside of his foot and Luis Fabiano glancing a header home.
Late on Frederic Kanoute won and converted a penalty for Sevilla.
The Andalucian side might be well off the pace in the Spanish league this season, but the Uefa Cup holders' brand of razor-sharp attacking proved just too potent for Arsenal.
Keita was the dominant player in midfield and the link-up between Jesus Navas and Daniel Alves on the Sevilla right regularly unhinged the Arsenal defence.
Sevilla's victory pushed them to the top of the group with 12 points, two points ahead of Arsenal, a result that confirmed the Spanish side's place in the knockout stages alongside the Gunners.
Arsenal had come to Spain hoping to win the group and Wenger entrusted the task to a team includeing Philippe Senderos, Eduardo, Gilberto, Bendtner, Armand Traore and Justin Hoyte.
These are players who have played cameo roles for Arsenal this season, though Bendtner and Eduardo were quick to remind Wenger they are very capable of taking leading roles.
The preamble to Eduardo's goal involved some eye-catching combination play on Arsenal's right wing as Emmanuel Eboue's ambitious backheel released Bendtner.
The Dane picked out Eduardo with a flighted pass and Arsenal's Brazilian-born Croatian held off Alves to slide the ball past Andres Palop.
If Bendtner and Eduardo looked sharp, Senderos and Gilberto had a more sluggish first-half as they tried to come to grips with the thrusts of Sevilla's attacks.
The Swiss defender's awful miskick gave possession to Navas and his cross was only partially cleared by Gilberto allowing Keita to bludgeon a shot home with the outside of his left foot.
More poor defending from Gilberto gifted an opening for Fabiano, but the Brazilian's effort was straight at Manuel Almunia.
Fabiano proved less generous to Arsenal when the next chance came his way.
Fabiano's darting run enabled him to get to Alves' free-kick ahead of Kolo Toure and the Brazilian striker's glancing header eluded Almunia's desperate dive.
Having frittered away their lead. Arsenal's discipline began to fragment and Hoyte was yellow carded for treading on Adriano Correia after a late tackle from the Sevilla player.
The second-half had a frantic start as Eboue claimed a penalty and Denilson picked up a booking for a nasty two-footed tackle.
Midway through the second half Sevilla claimed their own penalty, arguing Senderous handled the ball in the area, but that call also went unheeded by referee Eric Braamhaar.
The Dutch official appeared to give the penalty, before reversing his decision and awarding a drop ball.
But with three minutes left Braamhaar pointed to the spot when Kanoute went down under the combined challenges of Toure and Bakari Sagna.
Kanoute, who had missed numerous chances in the preceding 87 minutes, showed an altogether more deadly nature as he tucked away the penalty.
Just prior to Kanoute's goal Wenger was ordered to leave the technical area for remonstrating with the fourth official.
Arsenal manager Arsene Wenger:
"I had no exchanges with the referee.
"I don't know why I was sent off, I was
"The fourth official was really difficult for the whole game, I said to the referee 'will you explain to me why I have been sent off?'."
Sevilla: Palop, Daniel, Fazio, Dragutinovic, Crespo (Mosquera 63), Jesus Navas, Poulsen, Keita, Adriano Correia (Marti 90), Luis Fabiano (Kerzhakov 75), Kanoute.
Subs Not Used: De Sanctis, Renato, De Mul, Kone.
Booked: Crespo, Adriano Correia, Palop, Keita.
Goals: Keita 24, Luis Fabiano 34, Kanoute 89 pen.
Arsenal: Almunia, Justin Hoyte (Sagna 66), Toure, Senderos, Traore, Eboue, Fabregas (Rosicky 56), Silva, Denilson, Eduardo (Walcott 81), Bendtner.
Subs Not Used: Lehmann, Diarra, Flamini, Song Billong.
Booked: Justin Hoyte, Denilson.
Goals: Eduardo 11.
Ref: Eric Braamhaar (Holland).