Lyon advanced when Lisandro Lopez scored a last-minute goal to force a 1-1 draw at home to Liverpool, who had taken the lead seven minutes earlier.
Sevilla qualified despite losing their 100 percent record after a 1-1 home draw with VfB Stuttgart.
Inter Milan scored twice in the last four minutes to win 2-1 at Dynamo Kiev and rekindle their hopes while holders Barcelona failed again in the same group as they were held to a goalless draw in freezing conditions in Russia by Rubin Kazan.
Arsenal, inspired by two goals from Cesc Fabregas, thrashed AZ Alkmaar 4-1 and virtually assured their place in the next round although they need one more point to be certain.
Liverpool, who were again missing injured captain Steven Gerrard, went ahead with a bullet 25-metre shot from Ryan Babel in the 83rd minute.
Argentina forward Lopez levelled for Lyon in the last minute despite nearly colliding with a team mate.
Liverpool, third in Group E, are five points behind second-placed Fiorentina who thrashed point-less Debrecen 5-2.
(Editing by Tony Jimenez)