Martin Skrtel and Raheem Sterling with two goals each, along with Daniel Studrridge did the damage for the hosts, who struck early and often.
It was Liverpool's first home win against the London side since a 4-1 triumph in March 2007, when Peter Crouch scored a hat-trick.
Entering Saturday's match, Arsene Wenger's men had managed three victories in their last four Premier League trips to Anfield.
The three points lifted fourth-place Liverpool five points clear of local rivals Everton, who play Spurs on Sunday. Arsenal remain just two points ahead of Manchester City and Chelsea pending the outcome of their matches against Norwich and Newcastle, respectively, later in the day.
The home side jumped out to a quick lead after 51 seconds when Skrtel left-footed a shot into the net after taking a cross from Steven Gerrard following a set piece.
The same two players teamed up again nine minutes later as the Slovakian defender headed home a cross from his captain following a corner.
The rout was on at that point. Raheem Sterling made it 3-0 from close range after picking up a Luis Suarez pass after 16 minutes.
Three minutes later, Daniel Sturridge added to the visitors' misery after Philippe Coutinho fed him a through ball after a fast break.
At that point some of the delighted Anfield fans started chanting "There's only one Brendan Rogers" in tribute to the second-year manager.
Rogers had taken some stick earlier from pundits who felt his insistence that Liverpool could still challenge for the title was just empty talk.
Sterling struck again on 51 minutes, knocking in his own rebound after collecting a long ball that had sailed past the Arsenal defenders.
Mikel Arteta finally put the visitors on the board with a spot kick in the 69th minute after Gerrard pulled down Alex Oxalde-Chamberlain in the penalty area.