Arsenal were leading at half-time following Theo Walcott's neat finish.
And the visitor's lead was doubled via Mikael Silvestre's header from a corner.
But three goals in 10 minutes turned the game in Wigan's favour late on, with Ben Watson beginning the frenzy by side-footing in the first.
A mistake from Arsenal keeper Lukasz Fabianski allowed Titus Bramble to head Wigan level and then, deep into injury time Charles N'Zogbia's strike won it.
WIGAN, England (AFP) - Arsenal manager Arsene Wenger criticised his side's lack of concentration after they squandered a two-goal lead in the last 10 minutes to lose 3-2 against struggling Wigan.
The Gunners seemed certain to beat Roberto Martinez's side on Sunday after goals from Theo Walcott and Mikael Silvestre gave them a comfortable advantage going into the last 10 minutes at the DW Stadium.
But Ben Watson reduced the deficit and Titus Bramble punished an error by goalkeeper Lukasz Fabianski before an injury-time winner from Charles N'Zogbia shattered Arsenal's title dreams and lifted Wigan clear of the relegation zone.
Wenger was furious with his team's failure to close out a victory that would have moved them to within three points of leaders Chelsea.
"It is difficult to understand," Wenger said. "Maybe the players felt too much comfort and you have to keep focused for 90 minutes or you get punished.
"You cannot be happy with the way we conceded the goals. There was a lack of urgency there and we were punished.
"I believe at our level you don't want to give excuses and you want to show your character in every single game. You can always find an excuse but that is not important."
Wenger wants his side to react in a positive way in the remaining fixtures against Manchester City, Blackburn and Fulham, although lifting the dressing room after gifting three points to the opposition as they did here will be no easy task.
The French coach refused to discuss his side's title hopes and said only: "We have to focus and try to win our next games."
Walcott's classy finish after a fine through ball from Nicklas Bendtner and Silvestre's glancing header from Samir Nasri?s corner sent Arsenal into cruise control after 48 minutes.
But, led by N'Zogbia and 19-year-old Victor Moses, Wigan poured forward and no-one in the ground was surprised when Watson slotted home from 12 yards out with 10 minutes to go to breathe some life back into the home side.
With the final whistle approaching, Fabianski -- playing because of an injury to Manuel Almunia -- made the fatal mistake of dropping a corner onto Bramble's head and he nodded in before N'Zogbia thrashed home a 25-yarder with practically the last kick.
Martinez said: "Without a doubt that was (our) best win of the season. We have folded many times this season.
"We have been through some painful lessons this season, from the 9-1 against Spurs and, to come back from 2-0 down, I don't think too many do that, so I think we have learnt from our experiences.
"You don't get results like by accident, we deserved it."
Yet despite the huge boost in confidence and momentum the win is likely to give Martinez's squad, plus the fact the victory puts them comfortably clear off the relegation zone, the Spaniard is not ready to relax yet.
"We shouldn't get carried away, after Wednesday's (0-0) draw with Portsmouth, everybody said we were nearly relegated and now we should not think we are safe," he said.
"Not many come back from 2-0 down against Arsenal so we are really, really pleased.
"It has been a tough week for the players after not scoring against Portsmouth in the week but we deserved it.
"Moments like this are vital for our football club and our fans. I'm extremely proud of my players."
WIGAN (AFP) - Wigan shattered Arsenal's Premier League title challenge with a breathtaking burst of three goals in the last 10 minutes to win 3-2 at the DW Stadium on Sunday.
Goals from Theo Walcott and Mikael Silvestre seemed to have put the Gunners on course for a comfortable victory, but Wigan had other ideas as Ben Watson got one back in the 80th minute.
Arsenal were unable to hold on as a terrible mistake by goalkeeper Lukasz Fabianski, who dropped a corner onto Titus Bramble's head, gifted Wigan their last minute equaliser.
There was still time for Charles N'Zogbia to curl home a superb winner in stoppage time as Arsene Wenger's team went into meltdown.
The defeat means Arsenal are now six points behind leaders Chelsea with just three games to go and the north Londoners can kiss goodbye to their title hopes.
Wigan move seven points clear of the relegation zone after pulling off their remarkable turnaround.
Arsenal were without goalkeeper Manuel Almunia, who has a wrist injury, and the nerves Fabianski displayed from the start seemed to affect the entire Arsenal backline.
A Watson corner beat every single player in the crammed six-yard box as one glorious chance went begging.
At the other end, Nicklas Bendtner forced Chris Kirkland into one fine low save, while Walcott also did his best to open the scoring but could not quite break the deadlock.
Walcott made the most of a brilliant ball from Bendtner to give the Gunners the lead in the 41st minute.
Bendtner threaded the ball through to Walcott on the edge of the box and he shimmied through the Wigan defence and slotted past Kirkland.
Walcott then almost doubled the lead immediately as he again ran at the Wigan defence but his right footed effort cleared the crossbar with Kirkland well beaten.
Straight after the interval, Samir Nasri appeared to pull Watson down in the box but Wigan's frantic appeals for a penalty went unheard by referee Lee Mason.
To compound the home side's anger, Nasri then played a huge part in Arsenal's second goal as Wenger's side doubled their advantage in the 48th minute.
He delivered a fine corner from the right and Silvestre was given too much time by Wigan's defence and the French defender leapt highest to glance a header into the bottom right hand corner.
Wigan refused to be intimidated by the scoreline and kept on pressing to try and get back into the encounter.
N'Zogbia had the best opportunity to give Wigan a lifeline after he linked up wonderfully with Watson to carve a hole in the Arsenal defence but, although he was unmarked straight in front of the goal, his poor effort was comfortably saved by Fabianski.
With 10 minutes to go, Wigan did halve the deficit as Watson finished off a wonderful move to give Wigan a chance of snatching a point.
N'Zogbia charged forward and found Victor Moses unmarked on the right wing who then pulled the ball back for Watson to slam home from 12 yards out.
The game then took a crucial and crazy turn as Fabianski dropped an N'Zogbia corner inside his six-yard box which allowed Bramble to nod home the equaliser.
Arsenal were too shell shocked to react and in the first minute of injury time, N'Zogbia tried his luck from 25 yards and beat Fabianski to send most of the DW Stadium into a frenzy.
LONDON (AFP) - Arsenal squandered a golden opportunity to get back in the Premier League title race as Wigan scored three times in the last 10 minutes to clinch a remarkable 3-2 win at the DW Stadium on Sunday.
Goals from Theo Walcott and Mikael Silvestre had given Arsene Wenger's side a 2-0 lead by the 48th minute, but Ben Watson reduced the deficit in the 80th minute to spark a stunning meltdown from the Gunners.
A horrific mistake by Arsenal goalkeeper Lukasz Fabianski gifted Wigan an equaliser in the 89th minute as the Pole dropped a corner onto Titus Bramble for the defender to head home.
Then in stoppage time, winger Charles N'Zogbia cut across the edge of the Arsenal penalty area and curled a superb shot past Fabianski to shatter Wenger's men.
The defeat - Arsenal's third in a row - leaves the north London club six points behind leaders Chelsea with only three games to play and effectively ends their title bid.
Wigan's fightback means Roberto Martinez's team are now seven points away from the relegation zone and virtually guaranteed to stay up.
"It is the most disappointing defeat of the season with the way we conceded," Wenger said. "It is difficult to understand and accept, perhaps the players felt too much comfort but in football you must stay focused for 90 minutes and we were punished.
"We made mistakes and they took advantage, they were sharper in the final part of the game."
Later on Sunday, already-relegated Portsmouth host Aston Villa, who retain an outside chance of winning a place in the Champions League via a top-four finish.