City remained five points clear of Manchester United and moved nine clear of third-placed Chelsea and fourth-placed Newcastle United with second-half goals from Edin Dzeko, Aleksandar Kolarov and Adam Johnson.
Wolves’ goal came from a Stephen Hunt penalty after City skipper Vincent Kompany was sent off but it could not stop them slumping to a second defeat by City in four days after losing 5-2 at home in a League Cup match on Wednesday.
Manchester United bounced back from their 6-1 mauling by City last weekend with a 1-0 victory at Everton where Javier Hernandez scored the first-half winner.
Those results left City top with 28 points from 10 games, followed by United (23), Chelsea (19) and Newcastle United (19), at least until they meet Stoke City on Monday.
Bottom side Wigan Athletic suffered a seventh successive league defeat, a 2-0 loss at home to Fulham, while fellow strugglers Blackburn Rovers drew 3-3 at Norwich City who came back from 3-1 down and equalised with a Grant Holt penalty with the last kick of the game at Carrow Road.
With West Bromwich Albion playing Liverpool in a 1630 GMT kickoff, the first seven games of the day produced 29 goals with eight of them coming in an astonishing match at Stamford Bridge.
Arsenal won with a hat-trick from Van Persie, including two in the last seven minutes, and one each from Andre Santos and Theo Walcott.
Chelsea led twice with goals from Frank Lampard and John Terry but although they then came back to equalise with an 80th-minute goal from Juan Mata, they went on to concede five at home for the first time in a league match since Liverpool beat them 5-2 in 1989.
The stunning victory was Arsene Wenger’s 500th since he became Arsenal manager in 1996, Arsenal’s first away win in the league this season and Chelsea’s first home defeat as the English top-flight continues to dish out goals galore.
Chelsea went ahead through Lampard after 14 minutes before Van Persie equalised in the 36th minute and Chelsea skipper Terry took advantage of some woeful Arsenal defending to put his side 2-1 up in the last minute of the first half.
Santos struck Arsenal’s second equaliser after 49 minutes before Walcott scored a brilliant solo goal, picking himself up and continuing his run after slipping over, to give Arsenal a 3-2 lead after 55 minutes.
Mata then equalised for Chelsea with a brilliant swerving shot, which Arsenal goalkeeper Wojciech Szczesny had no chance of saving, to make it 3-3 after 80 minutes.
Chelsea were then guilty of some poor defending five minutes later with Florent Malouda hitting a stray pass back to Terry, who stumbled to leave Van Persie to run in on Chelsea keeper Petr Cech before rounding him and blasting the ball in.
The Dutchman then made it 28 goals from his last 27 Premier League games in this calendar year to make it 5-3 in the second minute of stoppage time with a swerving shot to match Mata’s.
Arsenal, who made a poor start to the season, climbed up to sixth place until the later matches at least and celebrated as if they had won a cup final.
“We needed to win with style and class and we did that against a big team and it was a big win for us,” Wenger told Sky Sports.
The result consigned Chelsea to a second successive defeat in a London derby after losing at QPR last weekend and was the first time they had conceded five against Arsenal since 1979.
Chelsea’s stunned manager Andre Villas-Boas said: “It was so open it could have gone either way. We will have to reflect on the mistakes we made—there are some things we must improve.”
At Goodison Park, Hernandez scored what proved to be the winner and gave United their first victory at Everton since September 2007 when he capitalised on good approach work from Tom Cleverley and Danny Welbeck before Patrice Evra crossed from the left for the unmarked Mexican to turn in on 19 minutes.
“It’s an important result to come away from home and win,” United manager Alex Ferguson told the BBC.
“Everton is never an easy game and they put everything they could into the game. First half we played some fantastic football and scored a good goal. Hernandez is fantastic in the box. It’s a good result and we worked hard for it.”
It was not all good news for United, though, as Chris Smalling sustained a fractured foot and Ferguson said the defender could be out for a month.
In other action, Swansea City beat Bolton Wanderers 3-1 and Sunderland drew 2-2 with Aston Villa.