Sol Campbell scored for Arsenal but two gifted goals gave Porto a win in their Champions League last-16 first-leg tie.
An own goal by keeper Lukasz Fabianski gave Porto the lead on 10 minutes when he spilled Silvestre Varela's cross.
The Gunners hit back as Campbell nodded in after Tomas Rosicky headed across Cesc Fabregas's flicked-on corner.
And after Rosicky was denied a penalty, Falcao poked in a Ruben Micael free-kick after Fabianski had picked up a back-pass from Campbell inside the box.
Arsenal will feel aggrieved after recovering brilliantly from their shambolic opening at Estadio do Dragao, yet there was still much on show to provide hope for the return leg in London on 9 March.
With an extensive injury list, Gunners boss Arsene Wenger said his team would need to "dig deep" and be "special" if they wanted anything out of their trip, but he would have been alarmed and delighted in equal measure within two minutes of kick-off.
And it was Campbell, making his first Champions League appearance since the 2006 final against Barcelona, who recovered brilliantly to tackle Falcao after the Colombian striker had cruised past the 35-year-old into the box.
Porto looked intent on ripping the visitors apart and soon after Hulk, banned in the domestic league since December, blasted wide, the all-important opener arrived thanks to a shocking error from Fabianski.
After turning Gael Clichy inside out, Varela crossed a relatively harmless ball in from the right, only for the Polish keeper, in for the injured Manuel Almunia, to spill the ball into the net.
It was a miserable start for the man starting only his sixth game of the season and subject to criticism in their FA Cup defeat to Stoke, but he would have been mighty relieved to see the goal cancelled out seven minutes later.
Campbell restored parity when he powered in a header from six yards after Rosicky had nodded back Thomas Vermaelen's flick from an inswinging Fabregas corner.
The former England centre-half looked ecstatic, celebrating two goals in successive Champions League matches for the London club that spanned three and a half years.
The goal settled Arsenal's early jitters as they sought their first win on Portuguese soil.
Wenger's side's only scare for the rest of the half was a 30-yard piledriver from Micael pushed safely away by Fabianski.
Nicklas Bendtner, deployed as a lone striker because of the injury to Andrey Arshavin, was enjoying more support from his increasingly adventurous team-mates and the Dane had a header pushed over by Helton from a dipping Fabregas free-kick.
The half ended with a heated exchange of words between both sets of players over a late tackle on Fabregas and the fireworks continued immediately after the break.
Rosicky was bundled over by Alvaro Pereira inside the box, and as the referee allowed play to continue, Porto broke away to set up the controversial goal that was to eventually decide the outcome of the match.
Campbell, the centre of attention once again, passed back to Fabianski but was shocked to see his keeper pick the ball up.
It was another moment of madness for Arsenal's stand-in number one and worse was to come as the quick-thinking Micael passed the free-kick to Falcao who calmly slotted into the net.
Wenger was incensed, thinking the pass had been accidental, and was even allowed a prolonged conversation with referee Martin Hansson - the same official who missed Thierry Henry's handball in France's win against the Republic of Ireland last year.
But the bizarre debate on the sidelines proved fruitless and as Arsenal pushed desperately for a late equaliser, the Porto rearguard stood firm to set up next month's intriguing clash at the Emirates.
Source: BBC
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