Bolton substitute Tamir Cohen headed the winner, leaving Arsenal nine points behind leaders Manchester United with four games left and almost certainly ending their bid to claim a first trophy since 2005.
Arsenal went into the match on an unbeaten 16-game run but a succession of draws had allowed United, who beat Everton 1-0 on Saturday, to open a gap at the top of the table.
"It is difficult to swallow the way we lost," Arsenal manager Arsene Wenger told Sky Sports.
"We had chances to win it but didn't take it and in the end we were caught in the way we feared today, from a corner. The week we have just had summed up our season — lots of quality in our game on Sunday, Wednesday and today but not enough rewards for our effort. We could have had nine points but we got two." United lead the way with 73 points, champions Chelsea are second on 67 and Arsenal, who have won only one of their last seven league games, have 64.
Manchester City, who visit Blackburn Rovers on Monday, are fourth on 56 with Tottenham Hotspur on 55.
Bolton were unrecognizable from the team thrashed 5-0 by Stoke City in the FA Cup semi-finals a week ago.
Their players used the match program to apologies to their fans for their performance at Wembley and they certainly set about the match as if they had a point to prove.
Lee Chung-yong missed two good chances before they took a deserved lead in the 38th minute. Gary Cahill's header from a corner was blocked on the line by Samir Nasri but Daniel Sturridge nodded in the rebound for his seventh goal in nine games since arriving on loan from Chelsea in January.
Bolton were awarded a soft penalty 30 seconds into the second half when Sturridge went down under little pressure from Johan Djourou but Kevin Davies shot weakly at Wojciech Szczesny.
Three minutes later Arsenal were level when Robin van Persie played a great one-two with Cesc Fabregas, who hit the post late in the first half, before scoring from the edge of the box.
A great save by Jussi Jaaskelainen denied Nasri in the 70th minute but though Arsenal, who were seeking a ninth successive victory over Bolton, dominated possession they struggled to test the keeper further.
Instead it was the home side who struck when Cohen, on the pitch for four minutes, powerfully headed home a corner.
He celebrated by tearing off his shirt to reveal a t-shirt bearing a picture of his father Avi, the former Liverpool player who died after a motorbike accident in Israel in December — and collected a mandatory booking for his actions.
"After last week, we wanted to show the fans we had the passion to prove to them that was just one bad day," Sturridge told Sky Sports.
"I have done my team Chelsea a favor today but I came out here to work for Bolton and their fans." Bolton manager Owen Coyle said: "I think everyone knows how bad we felt after the FA Cup semi-final and it was important we showed our character today — and we did that.
"We dealt Arsenal's title hopes a big blow but more important for us was our performance. I think we showed the real Bolton Wanderers today and went a long way to putting the smile back on our fans' faces." Arsenal host Manchester United in their next match on Sunday.
