Arsenal, who had possessed the Emirates Cup since 2015, went ahead in the 35th minute as Pierre-Emerick Aubameyang struck.
But they were hit by a Moussa Dembele double in nine minutes of second-half action as they suffered their first pre-season defeat.
Dembele bagged his first goal in the 66th minute and Lyon held on after he sealed his brace in order to get one over on Unai Emery and co.
New Arsenal signing Dani Ceballos made his first Gunners appearance from the bench, days on from signing on loan from Real Madrid.
While Gabriel Martinelli almost had a home debut to remember as his first touch after coming on went in, only for a handball to see the goal ruled out.
Arsenal’s defeat will be of minimal concern to Emery given it offered him an opportunity to get his players up to full fitness.
However, he will be worried by the fact Alexandre Lacazette picked up what could be a serious injury early on.
The striker, who has struck up a solid partnership with Aubameyang, was spotted hobbling out of the Emirates with a protective boot on his left leg.
Arsenal, who are closing in on £72m forward Nicolas Pepe, will be back in action on Wednesday when they travel to France to take on Angers.
And they will round off their pre-season campaign next Sunday when they face Barcelona at the Nou Camp, with the Joan Gamper trophy up for grabs.
The clashes represent contrasting tests for Arsenal, who finished fifth in the Premier League in Emery’s first year in London.
They kick off 2019/20 season on Sunday 11 August with a trip to St James’ Park as they pith themselves against Newcastle.