The Germans are unbeaten in the competition so far, having drawn with Montpellier HSC and beaten Olympiakos in their Group B opener ahead of their meeting with the Premier League outfit on Wednesday.
The Gunners sit top of the group having won both their opening matches, but Wenger admits that facing Schalke will be a difficult challenge.
"Schalke try to play good football and build from the back, like all German teams," said Wenger. "They've just got a very good result in Dortmund; they're a solid side with good organisation and up front they have [Klaas-Jan] Huntelaar and [Jefferson] Farfán, plus [Ibrahim] Afellay or [Julian] Draxler. They are dangerous on the counterattack.
"The Champions League is always a bit cagey. You play against teams that are always well organised, can play good counter-attacking football and are used to dominating games in their own championship. Teams do not only come to defend, they come to play their game; possession is much more even, which gives us more chances to score.
"What is important is that we want the ball, we concentrate on the quality of our game, express our talent and enjoy playing. We must keep faith in our game. This team has a very strong ambition, and on the pitch we have the quality to justify that ambition. There's still a lot more to come from this team."
Arsenal host Schalke 04 at the Emirates Stadium on Wednesday.