The Gunners are looking for defensive cover after losing Mathieu Debuchy to injury and Arsene Wenger has earmarked the England international as an ideal target, according to the Daily Mail.
Smalling was said to have been on Arsenal's wish list this summer and the North London club are believed to have touted the versatile defender as part of a swap deal for Thomas Vermaelen, prior to the Belgian joining Barcelona.
Wenger is said to have been a long-time admirer of the player and was even interested in signing Smalling in 2010 when he was at Fulham. However, Sir Alex Ferguson then intervened to secure the young defender's services for United.
Arsenal recorded an emphatic victory away to Aston Villa in the Premier League on Saturday.