De Bruyne was taken off at half time in the Citizens' goalless stalemate with Inter Milan in the Champions League on Wednesday night, not long after he was seen clutching his groin area.
The 33-year-old, who was sidelined for the first six months of last season with a torn hamstring, appeared to sustain his injury against Inter when sprinting towards goal to close down goalkeeper Yann Sommer.
Guardiola revealed after the match that he was informed by club doctors that De Bruyne was "not ready to play" in the second half, and he would be provided with "more info" about the severity of the playmaker's injury on Thursday when he underwent a scan.
Man City are already having to cope without injured duo Nathan Ake (muscle) and Oscar Bobb (leg fracture) and Citizens supporters have been sweating over the fitness of star playmaker De Bruyne following recent reports that he would miss Sunday's clash with Arsenal.
However, Guardiola has since issued a reassuring update on De Bruyne's condition ahead of the top-of-the-table encounter at the Etihad.
De Bruyne "could be involved" against Arsenal
Speaking at a press conference on Friday, Guardiola said: "Kevin feels a little better, but not yet (back in training). Today [he] is off and tomorrow is training and we will see."
Pressed on whether De Bruyne could still feature against Arsenal, Guardiola added: "He could be involved."
The likes of Phil Foden, Bernardo Silva and Ilkay Gundogan would have all been in contention to replace De Bruyne in a central midfield position had he been ruled out of Sunday's contest.
That could still be the case pending a late fitness test, but De Bruyne's potential inclusion in Man City's matchday squad would come as a major boost for Guardiola and co.
The Belgium international has scored eight goals in 21 matches against Arsenal - at least three more than he has scored against any other opponent in his career - and has also provided five assists.
All of De Bruyne's eight goals scored against Arsenal have come in the Premier League across six matches, including five at the Etihad, and only once have City failed to come out on top when the Belgian has found the net - a 2-2 home draw in May 2016.
Man City boast a 100% record in the Premier League after four matches and subsequently sit top of the table; they can move five points clear of second-placed Arsenal with a victory on Sunday.