Ronaldo has carried his stunning form with Real Madrid last season into the finals and heads into Wednesday's semi-final against Iberian rivals Spain as the tournament's joint leading scorer with three goals.
Arbeloa admits he is looking forward to the challenge of trying to stop his club-mate, who scored 60 goals in all competitions for Madrid last season.
Arbeloa said: "It's always physically and mentally demanding to face a player who is one of the best and playing at a spectacular level.
"I always like to measure myself against the best, it's a great challenge."
Ronaldo is not the only Madrid player Spain are set to come up against on Wednesday night, with defenders Pepe and Fabio Coentrao also key members of the Portugal side.
Those three, along with Spanish quintet Arbeloa, Iker Casillas, Xabi Alonso, Sergio Ramos and Raul Albiol, helped Madrid win their first La Liga title since 2008 last season.
However, Arbeloa warned his Portuguese colleagues not to expect any favours on Wednesday, saying: "It's the same as when you are at your clubs and you play against team-mates from the national side. Tomorrow [Wednesday] I will have not club-mates, they will be enemies.
"I don't usually speak with the people against who I'm going to play. I will fight to help Spain get into the final."
The world's most expensive player undoubtedly poses a major risk to Spain's hopes of defending their European title, but Arbeloa believes his side would be making a big mistake if they focused all their attention on the former Manchester United star as they seek to progress to a consecutive Euro final.
Right-back Arbeloa, who could find himself going head-to-head against his Madrid team-mate on Wednesday, said on Tuesday: "We all know that Ronaldo is an excellent player, but Portugal is not only Cristiano. They have had an excellent tournament with players of great quality and we have stop all of them, not only Cristiano.
"We know how good he is, and he is showing that at the Euros. We hope that we have a good game and Cristiano not so much."
Spain have had mixed success against Ronaldo and Portugal in recent years.
In the 2010 World Cup, Spain nullified the threat from Ronaldo to win their last-16 tie 1-0 in Cape Town before subsequently going on to lift the trophy.
Watch: Semi-Finals - Spain vs Portugal Preview... More Videos
However, in the last meeting between the two neighbouring counties, a friendly match in Lisbon in November 2010, Portugal ran out 4-0 winners following goals from Jorge Carlos Martins, Helder Postiga and Hugo Almeida and visiting defender Sergio Ramos, who put into his own net.
When asked about stopping Ronaldo on Wednesday, Spain coach Vicente Del Bosque said: "We will try to shut him down, the best example of which we can see in the World Cup, which gave us a good result.
"It will possibly be with different men and names, but the idea is always the same."