Despite dominating the ball throughout the contest, a wasteful Gunners XI were put to the sword by Xhaka's header into his own net and a deflected Samuel Iling-Junior effort in second-half injury time.
A recognisable Arsenal XI saw Aaron Ramsdale back in between the sticks, while a weakened Juventus side was headlined by Moise Kean, Daniele Rugani and former Gunners target Manuel Locatelli.
As such, it was no surprise to see Massimiliano Allegri's men camped inside their own half for the majority of the opening exchanges, and Reiss Nelson sent an effort into the side netting within the first minute.
Fabio Vieira then stung the palms of Mattia Perin with 10 minutes gone as Arsenal continued to dominate, but Mikel Arteta was dealt another injury blow with a quarter of the game gone.
Already without Gabriel Jesus and Emile Smith Rowe, Arsenal could not call upon Oleksandr Zinchenko (muscle), Takehiro Tomiyasu (hamstring) and Albert Sambi Lokonga (knock), and Nelson then pulled up with a suspected hamstring issue.
The Englishman left the field to be replaced by Marquinhos, but profligacy continued to plague the Gunners, who had an Eddie Nketiah goal ruled out for offside in the 34th minute.
Nketiah had the chance to make amends straight away as Fabio Miretti conceded possession in a dangerous area from the resulting free kick, but with Perin out of position and most of the goal gaping, he could only strike the post.
That wasted opportunity would come back to bite Arsenal in first-half injury time, as Xhaka headed an inswinging cross from Tommaso Barbieri into his own net to gift the Old Lady an undeserved half-time advantage.
Arteta's crop came out all guns blazing in the second half and managed to force the ball into the back of the net in the 61st minute as Nketiah challenged for a header, but history repeated itself for the striker, whose goal came after a clash of heads involving Gabriel Magalhaes and was subsequently chalked off.
The academy graduates arrived en masse in the final exchanges as Arsenal sought a way back into the match, but Allegri's staunch defence continued to hold firm and repelled a myriad of poor Gunners crosses.
Fifteen-year-old Ethan Nwaneri enjoyed a bright cameo and flashed an effort wide in the 88th minute after a smart swivel, but the final nail in the coffin would arrive via Iling-Junior in added time, as the 19-year-old's close-range shot from a tight angle deflected off of Rob Holding into the far corner.
The diminutive Bianconeri crowd would celebrate at the final whistle, and Arsenal now have nine days to recover before resuming Premier League duties at home to West Ham United on Boxing Day.
Meanwhile, Allegri's outfit travel back to Turin gearing up for their return to Serie A action against Cremonese on January 4.