The Gunners scored seven goals in Europe's premier competition for just the second time in their history as Mikel Arteta's men all-but secured their place in the quarter-finals.
Having not scored in their previous outings against West Ham and Nottingham Forest, there was fear from fans that their season was beginning to unravel.
While the Premier League title is seemingly out of reach with Liverpool 13 points clear, Arsenal showed at the Philips Stadion they mean business in Europe.
Arsenal were 3-0 up after just 31 minutes thanks to goals from Jurrien Timber, Ethan Nwaneri and Mikel Merino.
Noa Lang pulled a goal back from the penalty spot just before the break, but it was one-way traffic in the second half.
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Within two minutes of the restart, captain Martin Odegaard fired home from close range, with Leandro Trossard quickly adding a fifth.
Just 99 seconds separated the two goals, with Arsenal creating Champions League history following the Belgian forward's strike.
Leading 5-1 after just 48 minutes, no other team in the competition's history has scored as many away goals in quicker time.
Odegaard brought up his second of the match and Arsenal's sixth in the 73rd minute, before substitute Riccardo Calafiori sealed the stunning rout 12 minutes later.
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In another incredible record, Arsenal have become the first away team to find the back of the net on seven occasions in a knockout tie.
Meanwhile, it's the first time Arsenal have scored seven on the road in Europe since November 1993 when they beat Standard Liege 7-0 in the Cup Winners' Cup.
Arteta will be hoping history can repeat itself as Arsenal went on to win the tournament - which was then regarded as Europe's second-tier competition.
As for PSV, it was their joint-worst result in their 112-year history as fans loudly jeered following the full-time whistle.
In what was a historic night for Arsenal, Arteta knows his side will be in store for a tougher test in the quarter-final providing PSV don't spring the biggest comeback in history next week at the Emirates.
Arsenal look set to face either Real Madrid or Atletico Madrid, with Los Blancos having the advantage following their 2-1 first leg win at the Bernabeu.
More to follow...