Goals from Abdoulaye Faye and Greek international Stelios Giannakopoulos were enough for Sam Allardyce's side to shock their fellow Premiership high-flyers.
Victory for Bolton saw them go level with points to Arsenal and how they deserved their memorable victory.
After some early pressure, Joey O'Brien won the ball on the edge of the penalty area and from Giannakopoulos' return into the six-yard area, Faye rose highest to give the home side the lead.
Twelve minutes later it was 2-0, when perseverance paid off again, Kevin Davies dispossessed a lazy Gilberto Silva on the right touchline and crossed for Giannakopoulos to fly home from close range.
The impressive midfielder beat Lauren chasing back for the ball and was never going to miss with Jens Lehmann stranded.
Hungry to complete their second home victory over Arsenal in as many seasons, Bolton started brightly and didn't show any after affects of Wednesday night's energy-sapping extra-time victory over Leicester City.
But it was Arsenal who had the first real chance of the game.
Freddie Ljungberg found time and space on the right wing in the 16th minute, but Robin van Persie's header was easily saved by Bolton shot-stopper Jussi Jaaskelainen.
At the other end full-back O'Brien won the ball on the right-hand edge of the area, Giannakopoulos chased the ball down at the back post and flicked the ball across goal for Faye to head home for the lead.
Bolton's tactic of soaking up pressure and hustling for every tackle in the midfield worked and five minutes later it should have been 2-0.
Frenchman Bruno N'Gotty crossed to Davies, but his header was saved by Arsenal keeper Lehmann.
Arsenal skipper Thierry Henry saw a 29th minute free-kick stopped by Jaaskelainen, before Bolton doubled their advantage three minutes later, when Giannakopoulos fired home.
It was a deserved goal and Allardyce, sat with his chairman Phil Gartside in the main stand, must have been delighted with his team's cool composure.
The Reebok Stadium was not proving a happy hunting ground for Arsene Wenger's men.
Henry nearly spared some of the visitors' embarrassment with a moment of individual brilliance. The striker connected sweetly with a dipping ball on the volley, but his left-foot strike beat Jaaskelainen and agonisingly hit the foot of the far post.
A mistimed back header from Cesc Fabregas fell invitingly for Faye, who must have been eyeing a second goal as he charged in at the back post, but his header was brilliantly saved by Lehmann at point-blank range.
A third goal looked on the cards as Bolton pressed and pressed. Skipper Kevin Nolan nearly provided the spark.
The midfielder's sweet right-foot volley looked for all the world as if it was going to sale into the far corner, but Lehmann made another excellent fingertip save, diving full stretch to his left to tip the ball around the post.
Arsenal did score, but Van Persie's delicate lob over Jaaskelainen four minutes before the break was discounted after Henry was penalised on the edge of the area.
Arsenal pushed bodies forward in the second half and were nearly rewarded by captain Henry.
But the Frenchman's right-foot shot hit the foot of the post in the 54th minute and, just when it looked Robert Pires was going to tap in, Jaaskelainen somehow managed to snatch the ball from his feet and the Bolton defence cleared the danger.
Bolton got their third goal, only for it to be ruled out.
Faye outjumped Lehmann, but clearly handled the ball on his way to diverting it over the goal-line.
Arsenal made three substitutions, with Jose Reyes, Dennis Bergkamp and Emmanuel Eboue all coming on to give the visitors extra attacking options.
But no matter how hard they pushed, Bolton's defence held firm and kept Wenger's men at bay.
Man of the Match: Stelios Giannakopoulos - Tormented the Arsenal defence throughout the game and got his reward with a goal that gave the Trotters a decisive 2-0 lead in the first half.