The lead over their closest challengers, Manchester United, was five points, but by the end of the weekend events at St Andrews, coupled with United's 5-1 thrashing of Newcastle United, saw that advantage cut to three.
Having scored in recent wins over Everton, West Ham United and Manchester City, summer signing from Dinamo Zagreb Eduardo da Silva was starting to have an impact for the Gunners at a crucial time.
However, his season was ended in just the third minute against Birmingham when he suffered a sickening injury. The Croatian international beat Martin Taylor to the ball, but the Birmingham skipper could not stop his follow through as he caught the Arsenal striker on the shin, which snapped his fibula and dislocated his left ankle.
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Taylor was instantly dismissed by referee Mike Dean, while the players who remained on the pitch were visibly distressed by what they had witnessed. Following seven minutes of treatment, which included oxygen being given to the striker, Eduardo was stretchered from the field of play.
In terms of the action, 10-man Birmingham broke the deadlock in the 28th minute when James McFadden was brought down just outside the area by Mathieu Flamini. McFadden then dusted himself down to convert the resultant free kick with a curling effort.
The visitors, understandably, appeared to remain perturbed by their stricken teammate, but within 10 minutes of the restart they were in front thanks to young England international Theo Walcott.
First he scored from close range, and then he embarked on a solo run that saw him slot the ball into the bottom corner of Maik Taylor's net.
It seemed as though Walcott's intervention had sealed all three points for Arsene Wenger's charges, but as the match entered stoppage time, Birmingham snatched a point.
Gael Clichy hauled down Stuart Parnaby inside the area and McFadden stepped up to power in the resultant penalty, much to the anger of Arsenal defender William Gallas, who sat on the pitch after the final whistle, almost in tears.
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While Arsenal had dropped two points in the title race, unsurprisingly it was the injury to Eduardo that dominated the thoughts of both managers.
An unhappy Wenger said: "It goes with the idea that to stop Arsenal you have to kick Arsenal and that kind of thing was waiting to happen. Many people have got away with too many bad tackles. We've escaped a few times but it's just not acceptable. If that is football, it's better to stop it.
"The worst thing you hear after is that 'he's not the kind of guy who usually does that', but you need to only kill one person one time - it's enough."
As for Birmingham boss Alex McLeish, he jumped to the defence of Taylor: "I've seen the challenge and, yes, the studs land on Eduardo's ankle. In slow motion these tackles always look bad, but he's not a malicious player - Eduardo was just too quick for him. The referee's done his job, it's a sending-off, but Taylor's not a malicious player."
It was an injury that ruled Eduardo out of action for 12 months, but he struggled to hold down a regular spot in the team upon his return and was eventually sold to Shakhtar Donetsk in July 2010.
BIRMINGHAM: Maik Taylor; Kelly, Martin Taylor, Ridgewell, Murphy; Larsson (Nafti), Johnson, Muamba, Kapo (Zarate); McFadden, Forssell (Parnaby)
ARSENAL: Almunia; Sagna, Gallas, Senderos, Clichy; Walcott (Denilson), Fabregas, Flamini, Hleb (Silva); Eduardo (Bendtner), Adebayor