Li, the 2011 champion, went down 7-5, 3-6, 6-1 to the 103rd-ranked blonde Frenchwoman -- the Roland Garros junior champion in 2009 -- to suffer her first opening round defeat in Paris in eight visits.The 2hr 06min loss on a windswept and chilly Suzanne Lenglen court saw Li undone by 37 unforced errors.
Mladenovic, who was Australian Open mixed doubles champion this year with Daniel Nestor, goes on to face Alison Riske of the United States.
"It didn't matter who I was playing today I still would have lost. The problem was myself. I threw myself away," said Li.
It is a familiar scenario for Li who failed to get beyond the fourth round of the six Grand Slams which followed her 2011 Roland Garros breakthrough.
"I had no idea in my mind how to play the match. The first match at a major is always tough, the tension is different. You never know what will happen."
Mladenovic, who was 36 in the world last August, was in tears after her victory, her third over a top 10 player.
"It's just incredible," she said. "I don't have the words to describe what just happened. To beat the world number two in the first round at Roland Garros, it's incredible."
Li's shock defeat means that both Australian Open champions have been knocked out in the first round after Stan Wawrinka's listless defeat on Monday.
Ex-world number one Caroline Wozniacki, the 13th seeded Dane, lost 7-6 (7/5), 4-6, 6-2 to Belgium's Yanina Wickmayer in her first outing since her romance with superstar golfer Rory McIlroy ended.
"I was not prepared for this, it all came as a bit of a shock. I want to thank everyone for their support and sweet messages. I have to move on from this," said Wozniacki.
Also making an early exit was Bulgarian men's 11th seed Grigor Dimitrov who lost 6-4, 7-5, 7-6 (7/4) to giant Croat Ivo Karlovic.
Karlovic wasn't broken by Dimitrov who won the Bucharest claycourt title this spring and was a semi-finalist at the Rome Masters having seen off the Croat on the way.
The 35-year-old Karlovic, whose last win in Paris was seven years ago, next faces Austria's Andreas Haider-Maurer.
- Ferrer, Murray through -
Spanish fifth seed David Ferrer, last year's runner-up to Rafael Nadal, began his 12th Roland Garros by coasting past Igor Sijsling of the Netherlands, 6-4, 6-3, 6-1.
Ferrer, 32, has reached the quarter-finals or better at his last nine majors and goes on to play Simone Bolelli of Italy.
Britain's Andy Murray, the seventh seeded Wimbledon champion who made the semi-finals in 2011, saw off Andrey Golubev of Kazakhstan 6-1, 6-4, 3-6, 6-3.
Murray next faces Australia's Marinko Matosevic who beat Germany's Dustin Brown 7-6 (7/5), 6-4, 6-7 (1/7), 7-5 to register his first Grand Slam match win in 13 attempts.
"It was tricky out there, so it wasn't easy to play great tennis or very exciting tennis," said Murray.
Former world number one Lleyton Hewitt, now at 46 in the world and playing his 14th Roland Garros, was beaten 3-6, 6-2, 6-1, 6-4 by unseeded Argentine Carlos Berlocq.
Hewitt unleashed 56 winners but committed 53 unforced errors.
German 36-year-old Tommy Haas, the 16th seed, failed in his bid to become the oldest man since Jimmy Connors in 1991 to reach the second round when he was forced to retire with a shoulder injury against Jurgen Zopp of Estonia despite leading 5-2.
Romanian fourth seed Simona Halep reached the second round with a 6-0, 6-2 win over Russia's Alisa Kleybanova and next plays Heather Watson of Britain.
Svetlana Kuznetsova, the Russian 27th seed and 2009 champion, beat Georgia's Sofia Shapatava 6-3, 6-1 while 43-year-old Kimiko Date Krumm of Japan, a semi-finalist in 1995, lost 6-3, 0-6, 6-2 to Russian Anastasia Pavlyuchenkova, the 24th seed.
Ana Ivanovic, the 11th seed and 2008 champion, beat French world number 43 Caroline Garcia 6-1, 6-3 while fellow Serb, sixth-seeded Jelena Jankovic, a three-time semi-finalist, saw off Canada's Sharon Fichman 5-7, 6-1, 6-3.