The Premier League leaders got the job done in convincing fashion over the 90 minutes thanks to first-half goals from Gabriel Magalhaes, Eddie Nketiah and Fabio Vieira, and a team made up of academy players held their own in the final 25 minutes and created several chances of their own.
Neither side covered themselves in glory during the penalty shootout - where six in a row were missed - but Arsenal goalkeeper Karl Hein made four saves from the spot to ensure all four points for his side.
A strong Arsenal XI saw the likes of Gabriel, Kieran Tierney and captain Martin Odegaard start the match, while former Gunners striker Alexandre Lacazette wore the armband for Lyon.
Mikel Arteta's side immediately began the game on the front foot and took just seven minutes to carve out a chance, as Reiss Nelson struck Anthony Lopes's near post following Nketiah's cutback.
Lopes also charged off his line to keep Vieira out in the 17th minute, but the resulting corner two minutes later led to the opening goal, as Gabriel sent a bullet header into the side of the net from Odegaard's inswinging ball.
The goal was no less than the Gunners deserved after a dominant start to the match, and they had their second after 33 minutes following a rapid counter-attack.
Lyon committed numerous bodies forward, and Vieira and Nketiah were soon presented with a two versus one situation, with the former surging down the right and picking out Nketiah to curl home into the far corner.
Only six minutes later, Vieira turned goalscorer in brilliant fashion, as the Portuguese picked the ball up on the edge of the area and unleashed a venomous strike into the top corner from 20 yards.
Moussa Dembele's speculative effort over the bar represented Lyon's only half-chance of the first 45 minutes, and the second half started in a similar vein to the first, with substitute Marquinhos at the heart of the Gunners' attacks.
With 55 minutes on the clock, the 19-year-old cut inside and fired a left-footed effort towards goal from the edge of the box, which crashed against the bar after a touch from the fingertips of Lopes.
Marquinhos also fired into the side-netting on the 64-minute mark with the goal gaping, as Lopes had come out to challenge Nketiah for a ball which ended up bouncing over him into the Brazilian's path.
Arteta soon rang the changes, making no fewer than nine alterations as the likes of Lino Sousa, Catalin Cirjan and 15-year-old Ethan Nwaneri - the Premier League's youngest-ever player - earned valuable first-team minutes.
A much-changed Lyon side left Hein relatively untroubled, though, and Les Gones gave away the ball to Cirjan inside the box in the 80th minute, but the Romanian's effort hit the inside of the post before Nathan Butler-Oyedeji's follow-up was kept out by Kayne Bonnevie.
Arsenal secured an emphatic three-goal victory before having the chance to earn an extra point in the penalty shootout, where ex-Gunner Jeff Reine-Adelaide stepped up first for Lyon, but Hein dived low to his right to save.
Matt Smith, Marquinhos and Thiago Mendes converted their spot kicks, and Cirjan then tried to take a leaf out of Achraf Hakimi's book with a Panenka, but Bonnevie stayed put and had the simple job of catching the ball.
Lyon could not draw level in the shootout as Hein dived to his left to produce a fine save from Tete's penalty, although they would be handed another chance to do so as Bonnevie kept out Amario Cozier-Duberry's effort.
Laurent Blanc's side squandered their next chance to do so as Hein made his third save - this time from Bradley Barcola - but Reuell Walters then blazed over to keep the tie going a little bit longer.
However, Rayan Cherki's own dreadful attempt at a Panenka fell kindly into Hein's arms to confirm victory for Arsenal, who now have four days to recover before they meet AC Milan on December 13.
Meanwhile, Les Gones are back in friendly action on Sunday afternoon when they face another Premier League Big Six side in Liverpool.