The Gunners showed plenty of positivity in the early stages but were denied an opener due to Declan Rice straying offside before beating Walter BenItez.
There was still a massive scare at the other end, as David Raya palmed Ivan Perisic’s low cross into a dangerous area and Ismael Saibari crashed his shot against the crossbar under pressure from Gabriel Magalhães, before Ryan Flamingo sent his follow-up wide.
That moment was swiftly punished with Rice dinking the ball to the back post for Jurrien Timber rose to head home.
A second made in Hale End arrived just three minutes later, as Myles Lewis-Skelly squared a ball that was clinically finished by Ethan Nwaneri, who became the third-youngest scorer in a Champions League knockout match.
Lewis-Skelly just about avoided quickfire bookings, but the goals didn’t slow down as Mikel Merino capitalised on calamitous PSV defending by finding the bottom corner.
There was still a dampener in the 43rd minute, as Thomas Partey fouled Luuk de Jong while defending a corner and Noa Lang emphatically converted the ensuing penalty.
Rice and De Jong came close at either end before the break, and Arsenal reinstated their three-goal advantage through Martin Odegaard just over a minute after the restart.
Incredibly, the visitors had another 99 seconds later as Leandro Trossard linked up with Riccardo Calafiori and dinked the ball over Benítez.
De Jong saw a header saved as PSV looked to respond but Nwaneri continued to threaten with one of his shots being deflected behind by Olivier Boscagli, conceding a corner that culminated in Gabriel heading off-target.
Odegaard then glided to the edge of the box and beat Benítez despite the goalkeeper getting a hand to his shot.
The Norwegian also teed up Calafiori for Arsenal’s seventh as the Gunners recorded a fifth consecutive UCL proper victory for the first time since reaching the final in 2005/06.
They also inflicted PSV’s biggest ever home defeat to all-but confirm their quarter-final place.