Arco originated from a wealthy, noble family. After graduating from high school, he joined the Royal Bavarian Infantry Bodyguards and became an officer. Due to his anti-communist and - despite his Jewish mother - anti-semitic views, he assassinated the Bavarian State Premier Kurt Eisner on February 21, 1919. Immediately after that, he himself was gravely wounded by Eisner's entourage. The assassination of Eisner made Arco famous in one fell swoop. His deed was openly welcomed by the predominantly right-wing Munich student community. The Munich People's Court, chaired by Georg Neithardt, sentenced him to death in January 1920, but at the same time certified his honorable motives and convictions. After numerous protests, a demonstration at the university, and threats of a coup from the Reichswehr, the Bavarian Minister of Justice Ernst Müller-Meiningen pardoned him and sent him to prison. He was released in 1924 while awaiting parole and was granted amnesty by Reich President Hindenburg in 1927.
Arco initially worked as an editor for the "Bayerischer Vaterland," and later for Lufthansa, among others. He hardly appeared politically anymore. Only in 1933 did Arco once again make a name for himself in Munich; he was imprisoned after a rumor circulated that he had planned an assassination on Hitler, but he was able to credibly refute this rumor. Arco passed away in an automobile accident in 1945.