The Blues skipper was expected to return from the ankle injury he sustained at Swansea two weeks ago.
It was reported Terry had returned to training and only missed the midweek League Cup win at Leicester to get him fit for the Gunners fixture.
But now new Chelsea manager Antonio Conte must take his team into the home of their main London rivals without his leader at the back.
Conte confirmed: “John hasn’t recovered from his injury.
“He’s working, working, but he hasn’t recovered for the game against Arsenal. I don’t know (when he will be back). In this case it’s important what the player feels, the pain he feels.”
Chelsea are looking to bounce back from their first Premier League defeat of the season, against Liverpool last Friday.
The Blues are undefeated against Arsenal in their past nine league meetings, but Conte is expecting a tough test at the Emirates.
“This is a big game between two big rivals,” he said.
“It’s important to play a good game. Above all after our defeat against Liverpool. But we know that we’ll face a team, a good team, a big rival.
“I’m sure that Arsenal will fight until the end to win the title because they’re a very good team, (with) young players, great technique, good players with good physical potential and organisation.
“When there are these types of games, they’re very tough. It’s not necessary to push any player. These big games give great emotion and great expectation. For this reason the players are already motivated.
“(Chelsea) can improve a lot. It’s normal that, when you start work with a new team, and you bring a new idea or method of football, you need a bit of time. But I’m confident about this. We trust in the work. I know that we can improve a lot.”