A Harry Kane goal right at the start of the second half condemned us to defeat in the north London derby at Wembley Stadium.
We were indebted to Petr Cech, who made a string of fine saves, but the veteran goalkeeper could do nothing to prevent the Tottenham striker scoring the only goal of the game.
The match got off to a typically-frantic start, with the hosts determined to impose themselves on the game while we were happy to sit back and soak up the early pressure.
With Jack Wilshere snapping into tackles and stroking the ball about in the centre of the park, we soon settled into the game and created the first chance of any note.
It came as Wilshere collected the ball outside the area and bisected the Tottenham defence with a delightful reverse pass to set Pierre-Emerick Aubameyang clear on goal - but the flag was raised.
It was a desperately tight call, but despite it going against us we continued to push on although the hosts also looked dangerous in possession.
Indeed, they wasted a glorious chance to open the scoring when the lively Heung-Min Son picked out Kane in the area, but the striker headed over from close range.
Just before the break Hector Bellerin went close with a shot from outside the area that flew over the bar, but the two sides couldn't be separated at the interval.
But it was the hosts who started the second period the brighter, and they took full advantage when Kane rose highest in the area to head home a cross from the left.
The Tottenham forward has a fine record against us, and he came close to doubling his side's lead minutes later but glanced a header inches wide of the far post.
The hosts had their tails up, Kane in particular and he sent a stinging volley at goal but Cech was equal to it as we fought to stay in the game - and the Arsenal keeper made a superb stop soon after to palm away a Christian Eriksen free kick.
Alexandre Lacazette and Alex Iwobi were thrown into the mix as we looked to change the shape of the game, and the next chance was ours as Wilshere sent a curling shot at goal but Hugo Lloris was able to make the save.
Son, Dele Alli and Erik Lamela all missed good chances in quick succession as we left space open as we tried to claw our way back into the game.
Cech was certainly the busier of the two goalkeepers and he was called upon again with 15 minutes remaining to make a fine save to deny Kieran Trippier from close range.
Try as we might, we could not find a way back - although Lacazette had a late chance that he put over the bar - and we left the national stadium empty-handed for the first time since 2011.
HOW IT HAPPENED
See how the match unfolded with our play-by-play commentary.
We travel to Sweden for the first leg of our Europa League last-32 clash against Ostersunds.
We are considered favourites for the tie, although the conditions could be a factor with temperatures dropping as low as -19c last week, although it is expected to be marginally warmer for our clash.
With Aaron Ramsey missing out with a minor groin injury, Jack Wilshere was back in our starting XI - and was at the heart of the derby action.
Here are some of his key moments from an action-packed affair at Wembley Stadium:
12 - Jack collects the ball outside the area and slips a delightful reverse pass in behind the defence for Aubameyang, but the striker is flagged offside - but it looks very tight
19 - Bellerin's ball in from the right is headed up in the air by Vertonghen and drops to Wilshere on the volley, but he mistimes his shot and Tottenham are able to clear
68 - Wilshere pounces on a loose ball outside the area and sends a curling effort at goal, only for Lloris to make a sprawling save
86 - Jack does brilliantly to race back and win the ball from Eriksen, before turning and racing forward and slipping a ball into Welbeck, but Lloris gets down to save
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