League Two side Fleetwood Town produced one of the great shocks in Carabao Cup history on Tuesday night, knocking Premier League champions Arsenal out of the competition with a 5-3 penalty shootout win after a 1-1 draw at Highbury Stadium.

Aaron Loupalo-Bi gave the hosts the lead in the 21st minute, beating debutant Arsenal goalkeeper Illan Meslier with a low finish after getting in behind the visitors' defence. Viktor Gyokeres levelled in the 50th minute, but Arsenal could not find a winner despite out-shooting Fleetwood 15-2 after the break — and their night got worse when 16-year-old Max Dowman was sent off in the 85th minute for kicking out at Harrison Neal. In the shootout, Fleetwood converted all five of their penalties, goalkeeper Jay Lynch saved Bruno Guimaraes' effort, and Conor Haughey scored the winning kick as the home fans flooded onto the pitch.

The night had started strangely, with play halted for around eight minutes in the opening 10 minutes after a drone flew over the stadium, forcing both teams off the pitch before the match resumed. Fleetwood, who sit 18th in League Two, held firm through the second half and then held their nerve from the spot to seal the most famous night in the club's history.

Arsenal boss Mikel Arteta, speaking to Sky Sports after the game, refused to blame his players' attitude. "First of all, congratulations to Fleetwood for going through to the next round in the manner they've done it," he said. "A really sad day for us. I cannot fault at all the attitude of the players, I haven't seen anybody not doing what is required at this level but we had so much of the ball, had so many chances, so many shots and if you want the margins to be bigger than going to penalties, you have to capitalise on that. We didn't and football is about that."

Arteta added: "It wasn't to do with attitude otherwise I would be here fuming. I'm sad, we're all sad. We have a responsibility to represent this badge in the best possible way. It was nothing to do with effort, application or determination to go and win it, but we lacked other things to create much bigger margins. With what we produced, it should have showed in the scoreline."

The defeat is Arsenal's first against fourth-tier opposition since Bradford City beat them on penalties in the Carabao Cup quarter-finals in 2012. Arteta made nine changes to his side, according to theScore, and the champions paid for their wastefulness in front of goal — with Fleetwood goalkeeper Lynch the hero of the night. Fleetwood will find out their quarter-final opponents when the draw takes place after Wednesday's ties.

Elsewhere on Tuesday, Bradford City beat Peterborough United 2-0 — Macaulay Gillesphey in the 13th minute and Adam Phillips in the 67th — to reach the quarter-finals for the first time since their run to Wembley in 2013. The fourth round continues on Wednesday, with Liverpool hosting Chelsea in the tie of the round and Manchester City facing Brighton, while Arsenal now turn their attention to Sunday's Premier League trip to Liverpool.