Pepe, 25, scored his tenth goal of the season on Thursday night to set the Gunners on their way to a 4-0 Europa League win at Slavia Prague.
Arteta said: “We all know Nico has the incredible ability to succeed and we can give him all the help he wants to achieve that.
“But now it all depends on him because he needs to have the right mindset to consistently do what he can.
“What he has produced in the last few games is the level of performance that I am going to ask from him all the time.
“And if it is something below that level then he is not going to be playing.
“The biggest thing for Nico is understanding what he needed to do when he was not in the team and then producing that when he did play.
“He needed a period of adaptation after coming from the French league but that is over. We can't talk about adaptation any more. Now it is all about performance.
“Nico has the players to support him, a manager that trusts him, all the staff that are willing to help him and team-mates who really like him. So now there are no excuses."