She finished behind American two-time X-Games Champion Chloe Kim (96.50) with Korean Yu-rim Yeong (84.50) claiming the bronze.
"I'm so excited," said the 16-year-old from Woronora Heights in Sydney.
"When I landed my second run I was over the moon and couldn't keep back my smile. I'm so, so happy."
Arthur started with a great first run of 87.25 to sit seven points behind Kim. The American then improved to 96.50 and the Australian with some more confidence and amplitude improved to 90.0.
On the third and final run 15-year-old sensation Kim had another great run but could not improve her score. Arthur had a fall on the final run with the silver medal already guaranteed.
"After my first run I was in the high 80s and I was really confident heading into my next run. When I got into the 90s I was amazed and so happy.
"Chloe (Kim) killed it and I just came to land my run and I did that so I'm stoked."
Arthur, whose parents are here from Sydney, had two falls at her last World Cup in Park City, but delivered here at the Youth Olympics when it mattered most.
"We are so happy for her," said Emily's mum Sandra.
“The crew and support have been amazing and it was definitely worth the trip.”
Coach Johnny Lipzker was equally as proud of the young gun with a heap of potential.
“It’s awesome,” he said. “She came here to do a run, she landed it and it was good enough for second. We are all so stoked for her.”
“To pull out some of the best runs of your life when it matters the most is every athlete’s dream,” added Australian Chef de Mission Ian Chesterman who was cheering Emily home.
“Emily was not far behind the number one women’s halfpipe athlete in the world so it shows she has class and produces it when it matters the most.”
While the future is bright for Arthur, she is pretty excited just to get back to the Village to see all her Aussie teammates.
“The Village is going to be crazy. I’m excited to see everyone again, I’ve missed all my roommates (since moving down to Oslo) so it should be great.
Mullins from Albury in NSW competed in the pipe for experience and she can now focus on her pet slopestyle event later in the week, where she has finished top 10 in a senior World Cup this season. Arthur will also compete in slopestyle.
The medal here at Lillehammer 2016 continues Australia’s podium streak in Olympic winter competition which started with short track relay bronze back at Lillehammer in 1994.