The German international is widely thought of as one of the very best deep-lying playmakers in European football, and has been a Bundesliga star for some time.
Despite his importance to Dortmund, Arsenal are eager to snap up the 23-year-old this winter as Arsene Wenger plots a genuine assault on the Premier League title.
Gundogan is thought to be valued at around £25m, but his current employers are far from keen to let him leave the Westfalenstadion.
Barcelona are also looking at the central man, and are believed to see him as an ideal long-term successor to current idol Xavi.
But, the Gunners are hopeful that their strong contingent of German players may aid them in making a move.
Mesut Ozil became the latest player from the nation to move to the Emirates Stadium over the summer, joining the likes of Lukas Podolski and Per Mertesacker.
Meanwhile, Arsenal are also watching Basel defender Fabian Schar.
The 23-year-old has been in fine form for the Swiss side, and Wenger was alerted to his talents following his impressive Champions League display against Chelsea earlier this season.
Do Arsenal really need a another midfielder? Or should Arsene Wenger be looking at top class strikers?
Tell us what you think below!