It was the conclusion to a compelling encounter in which the hosts twice fought back and threatened to win when Elijah Adebayo and Ross Barkley scored in an eight-minute period after the break, with Arsenal goalkeeper David Raya culpable for both goals.
However, the Hatters were denied a valuable point when Rice met Martin Odegaard's cross in the seventh minute of stoppage time, 23 seconds after the six official minutes added on had expired.
Arsenal had dominated a largely uneventful opening to a game which sparked into life when Gabriel Martinelli steered Bukayo Saka's pass into the bottom-left corner.
Gabriel Osho's header from Alfie Doughty's corner brought the hosts level shortly after, but when Gabriel Jesus nodded in Ben White's cross from close range the Gunners looked to have regained control.
But in a chaotic period after the interval, the league's best defence suddenly appeared flustered with Adebayo leaping above Raya to head in another Doughty delivery from a corner.
And with Luton in the ascendency, Barkley collected an Andros Townsend pass and beat White before driving a low left-foot shot under Raya.
The momentum swung back towards Mikel Arteta's side when Kai Havertz prodded in from the impressive Jesus' pass to equalise, but Luton looked to have held the visitors at bay until Rice's dramatic intervention.
The result leaves Luton 17th, two points above the relegation zone. Second-placed Liverpool, five points adrift of Arsenal, play their game in hand at Sheffield United on Wednesday (19:30 GMT), while Manchester City, a point further back, are at fourth-placed Aston Villa (20:15).
Jesus stars as Raya blunders rekindle goalkeeper debate
Arsenal have now won their past six matches in all competitions but there were clear positives and negatives to take from this latest success.
Jesus underlined his importance to Arteta's side with a superb contribution that saw him have a hand in two goals and score another.
The Brazil forward's quick thinking caught Doughty out for Arsenal's first goal, while his physicality and perfectly weighted pass gave Havertz the simplest opportunity to level at 3-3.
While he has only scored two top-flight goals this season, his influence is key. He has not lost any of the 58 Premier League games in which he has scored for Arsenal or Manchester City, and the Gunners will need to keep him fit if they are to stay the course in the title race.
On the flipside Arteta's team had conceded just three league goals on their travels before kick-off, but they leave Bedfordshire with that tally having doubled.
All three appeared preventable, with Martinelli standing and watching as Osho got Luton back on track for the first time in the evening.
The performance of Raya will also undoubtedly add further scrutiny to Arteta's decision to prefer his fellow Spaniard as first-choice goalkeeper to England stopper Aaron Ramsdale.
Gallant Luton go close
For Luton, this was another occasion when they came so close to delivering a result their fans could only have dreamed of on their long climb back up the English football pyramid.
While Luton famously beat the Gunners in the 1988 League Cup final, Andros Townsend was the only player in their starting XI on Tuesday to have been born when the clubs last met in the English top flight 32 years ago.
Their draw against Liverpool in November showed exactly what they are capable of against the Premier League big boys, and on another night they would have secured at least a point for their endeavours.
Barkley excelled in midfield and both Teden Mengi and goalkeeper Thomas Kaminski impressed for Rob Edwards' side, who also face Manchester City, Newcastle and Chelsea at home before the end of the year.
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