The timing and accuracy of perceptual decision-making is exquisitely sensitive to fluctuations in arousal. Although extensive research has highlighted the role of various neural processing stages in forming decisions, our understanding of how arousal impacts these processes remains limited. Here we isolated electrophysiological signatures of decision-making alongside signals reflecting target selection, attentional engagement and motor output and examined their modulation as a function of tonic and phasic arousal, indexed by baseline and task-evoked pupil diameter, respectively. Reaction times were shorter on trials with lower tonic, and higher phasic arousal. Additionally, these two pupil measures were predictive of a unique set of EEG signatures that together represent multiple information processing steps of decision-making. Finally, behavioural variability associated with fluctuations in tonic and phasic arousal, indicative of neuromodulators acting on multiple timescales, was mediated by its effects on the EEG markers of attentional engagement, sensory processing and the variability in decision processing.