The Gunners took the lead thanks to a nice Robin van Persie finish - which came after he had won the ball in midfield and then received a pass from Theo Walcott - three minutes before half-time but after that it was all Dortmund as the reigning German champions dominated proceedings in the second half to pull out a stunning equaliser in the 88th minute.
The Gunners defence won the header from Marcel Schmelzer's late free-kick but substitute Ivan Perisic was on hand to hit a first-time left-footed volley from outside the area into Wojciech Szczesny's top left corner for his maiden Dortmund goal.
Juergen Klopp's men had the far better of the chances throughout, the first coming in the 12th minute when young gun Mario Gotze played in Robert Lewandowski who rounded Szczesny but could not beat Bacary Sagna who cleared off the line.
Arsenal often looked shaky and were error-prone at times whilst getting cut open by the Dortmund attack but they did manage to fight back through van Persie's strike and on the counter were sometimes extremely dangerous.
Overall, Arsene Wenger would be happy to come away with a point considering he was without Jack Wilshere, Aaron Ramsey and Thomas Vermaelen and the fact that Dortmund had so many chances and he would also be buoyed by the performance of his players who showed strength and resilience to hold out for most of the 90 minutes.
Szczesny was imposing at times and managed to hold off Dortmund when he first kept out Neven Subotic's shot from inside the six-yard box that had fallen from a corner in the 81st minute before staving off a home victory when he was brave in advancing for Subotic's pass for Lewandowski in injury time.
TRIBAL ASKS: Will Wenger be happy to come away from this one with a point or was it a lost opportunity?
Signal Iduna Park (Westfalenstadion), Dortmund - approx. 70,000
First Champions League match for Dortmund since 2003, 10 players making debut in the competition.
Dortmund lost just once to English clubs in seven matches at home.
No clean sheets in last 12 visits to Germany, one clean sheet in last 18 away CL games.