Arsenal squandered a two-goal lead in Germany as Schalke denied Arsene Wenger victory on his return from a touchline ban.
The Frenchman has been forced to watch the first three Group B fixtures from the stands, including the surprise 2-0 defeat at the hands of the Bundesliga outfit a fortnight ago.
Arsenal's long unbeaten Champions League home run came to an end that night and they had looked set to get revenge in Gelsenkirchen after netting two first half goals in quick succession.
Having held off Schalke's intense early pressure, Theo Walcott netted his 50th goal for Arsenal against the run of play in the 18th minute after Olivier Giroud was dispossessed in the box.
The France international got in on the action eight minutes later with a superb diving header, but Klaas-Jan Huntelaar reduced the deficit in first half stoppage time.
Arsenal were pinned back as Schalke poured forward in search of an equaliser and, despite goalkeeper Vito Mannone's best efforts, it came when Jefferson Farfan fired home via a Thomas Vermaelen deflection.
The big talk before kick-off surrounded Andre Santos, who was dropped after a poor performance in Saturday's 2-1 defeat at Manchester United was compounded by his ill-advised decision to ask former team-mate Robin van Persie for his shirt at half-time.
Laurent Koscielny came into the starting line-up in his place and Walcott overcame illness to replace the injured Aaron Ramsey.
Schalke, who named an unchanged side despite manager Huub Stevens suggesting otherwise, began brightly and Mikel Arteta blocked a Christian Fuchs effort five minutes in.
Arsenal were struggling to get the ball out of their half and somewhat fortunate not to go behind when Lukas Podolski was caught in possession and Schalke broke, with Mannone saving superbly to deny Ibrahim Afellay at his near post.
The Royal Blues' pressure did not relent and Benedikt Howedes headed over a Farfan corner as they continued to press for an early opener that, rather surprisingly, came at the other end.
Roman Neustadter's poor back header put through Giroud through on goal and, when the dallying Frenchman was dispossessed by Howedes, Walcott collected the ball and went on to slot home unopposed.
Santi Cazorla and Joel Matip were booked shortly after the 18th-minute effort opener, before Atsuto Uchida was forced off injured.
Marco Hoger slotted in at right-back and soon found himself caught out by Podolski. The Germany international turned the substitute and whipped in a low cross that Giroud met with a superb diving header in the 26th minute.
Schalke looked shellshocked and Fuchs was booked, before Giroud headed straight at goalkeeper Lars Unnerstall. But, just as Arsenal looked set to go into half-time with a two-goal cushion, neat interplay from the hosts put Huntelaar through and he lashed home in stoppage time .
It was a classy finish by the Dutch international but one he could not match six minutes after the restart. Huntelaar went through on goal after connecting with Jermaine Jones' through ball, but Mannone made himself big and saved brilliantly.
While Giroud had miscued a great shot just moments earlier, it was the hosts that were on top as Arsenal again came out the blocks slowly. Last-ditch defending and fine goalkeeping was all that was keeping Schalke at bay, with a combination of Arteta and the post denying Hoger.
Podolski was booked for kicking the ball away in frustration after referee Nicola Rizzoli called halt on their attack due to injury to the Schalke right-back, who had to be replaced by Kyriakos Papadopoulos.
When play resumed Mannone did brilliantly to palm away a driven Lewis Holtby effort, before stopping a long-range Afellay strike.
The Italian goalkeeper could not keep Schalke at bay for much longer, though, and when Farfan collected the ball on the right-hand side of the box he fired home via a deflection off Thomas Vermaelen.
Arsenal responded well to the 67th minute goal and Walcott hit the post, only to be ruled offside. Jones was cautioned and then denied by Mannone as the match entered a final 10 minutes in which neither side was able to find a winner, with Huntelaar heading over and Walcott denied by Unnerstall's outstretched leg deep in stoppage time.