Henry’s solo effort registered the first triumph ever for an English side at the Santiago Bernabeu and handed Real Madrid their first home defeat in the Champions League since 2002.
The stunning win put Arsenal on the brink of qualifying to the quarter-finals as they now need only a draw in the second-leg in Highbury after two weeks.
Arsenal began in an explosive style and rocked Real back on their heels, creating three chances in the first 15 minutes but couldn’t deliver on any of them.
Spanish striker Jose Antonio Reyes almost opened the score line as early as the second minute when he latched on to Henry’s through pass before firing a first-timer at Real keeper Iker Casillas who managed to palm it away.
Shortly after, Henry dished out another defense-splitting pass to Freddie Ljunberg who rounded Casillas but Real defender Roberto Carlos tipped the ball to a corner-kick.
In the 15th minute, Reyes raced down the left and swung an inch-perfect cross to Henry whose header went just wide.
Arsenal keeper Jens Lehmann was forced to make his first save just before the break when he punched away a powerful free-kick from Carlos before holding on to a Robinho weak strike on the rebound.
In the 47th minute, Henry broke the deadlock when he scuffed the ball in the midfield and danced his way past three Real defenders before drilling a low left-footer past the advancing Casillas.
Real coach Lopez Caro threw both Julio Baptista and Raul, who made his 100th appearance in the Champions League, in the fray searching for the equalizer but the Londoners defended in numbers to keep their precious victory.
Champions lose
In Portugal, Benfica defender Anderson Luisao headed home in the closing stages of the match to give his side a hard fought 1-0 victory over title holders Liverpool.
Luisao got in front of Sami Hyypia in the 84th minute to connect with a neat cross from Armando Petit before steering a header past Liverpool keeper Jose Reina.
Liverpool still have a chance to recover when they host the second-leg in Anfield on March 8th.
The visitors played without their inspiring midfielder Steven Gerrard who suffers a knee injury.
Liverpool also lost Malian midfielder Mohamed Sissoko in the first period due to injury and he was replaced by Dietmar Hamann.