The Gunners believe the speedy and strong Wan-Bissaka, 21, would be the perfect fit for them.
Boss Unai Emery wants quick players and has found right-back to be a problem position at the Emirates.
Wan-Bissaka can tackle and also get forward — qualities Emery craves.
Arsenal would have to pay £40million or more and offer top wages but are not being deterred by that.
Everton were the first club to show an interest after Wan-Bissaka emerged as a first-team regular at Palace and they are still keen.
But staying in London may appeal to the Croydon-born prospect.
Manchester City have also been considering the young Eagle, but right-back is not a priority position for them.
Bayern Munich have been looking too, but Arsenal are front-runners.
Palace are checking on Chelsea prospect Reece James, 19, as a potential replacement. He is on loan at Wigan.
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