Joe Willock sealed the win with his spot-kick for the Gunners after Bernd Leno made two penalty saves.
Arsenal boss Mikel Arteta heaped praise on his side after they beat Liverpool on penalties to reach the quarter-finals of the Carabao Cup.
After a goalless 90 minutes on Merseyside, Gunners shotstopper Bernd Leno saved two penalties in the shootout before Joe Willock secured the win by putting his spot-kick into the net.
After the match at Anfield on Thursday night, Arteta said his Gunners were 'exceptional' for bouncing back to winning ways following their Premier League 3-1 defeat to Jurgen Klopp's Reds on Monday night.
While speaking to Sky Sports, Arteta said: "I am really happy with the performance. I think the boys were exceptional. We corrected a few things from Monday and it was superb.
"We competed much better, the level of aggression we had, the way we pressed them really high was exceptional. Bernd Leno was really good. When we needed him we had him. You need a top individual performance to win at Anfield and that is what we had tonight.
"I really have belief in Bernd. I know him really well and what he can give us. We didn't want Emiliano Martínez to go but it was probably the right thing for both parties to do. The gap towards Liverpool is still big. We will keep improving to try and reach their level."
On drawing his former club Manchester City in the quarter-finals, the Spaniard said: "I was waiting and enjoying the victory and then we have to play Manchester City. It is what it is, there are a lot of tough teams left in the competition and we will prepare for it."