Didier Drogba edged the Blues into the lead after a hapless performance saw his side go behind, but two exquisite finishes from half-fit substitute Sergio Aguero denied Carlo Ancelotti's men from keeping up their 100 per cent record in the competition thus far.
The draw was enough for Chelsea to confirm their presence in the draw for the last 16 of the draw, whereas the La Liga side can now only qualify for the Europa League at best.
The match was absent of quality throughout, with long periods of play resembling a first round FA Cup tie with persistent long balls, fouls and wild shots on the agenda from both sides.
But it was the La Liga outfit who were the slightly better of two bad eggs and they went close to opening the scoring in the first period.
Arsenal flop Jose Antonio Reyes forced Petr Cech to make a fine save with a curling, dipping effort from distance in the only period of play of note in the opening hour.
But the introduction of Argentinian wonderkid Aguero, who was visibly struggling with injury, brought the game to life after half-time.
It was he who opened the scoring in the 66th minute, latching onto a headed clearance from John Terry to volley past the helpless Cech from 18 yards.
Chelsea failed to respond despite making a double-change soon after and it was left to Drogba to drag the Blues out of the rut all by himself.
The Ivory Coast hitman's sheer size and athleticism saw him rise above everybody to nod home Florent Malouda's cross from six yards to bring his side level with seven minutes left on the clock, before producing the moment of the match five minutes later.
A searching through-ball from Ashley Cole presented little danger, but Drogba burst through two defenders to meet it first.
After showing his power, he then demonstrated his delicate touch by dancing through two challenges to go one-on-one with Sergio Asenjo in the Atletico goal.
Asenjo was up to the first attempt, but presented Drogba with a rebound chance which he stroked home with ease.
Though Drogba thought he had done enough to win his side the game, it would be Aguero who would have the last laugh.
A curling right-footed free-kick that would have made David Beckham proud proved too good for Cech to stop and perhaps put himself in the shop window for a potential raid for his services from Stamford Bridge in future.