Macron is the clear favourite to become France's youngest-ever president after topping Sunday's ballot with 23.75 percent of votes, slightly ahead of National Front (FN) leader Le Pen on 21.53 percent.
The result reflected a desire for change in the deeply divided country, with the top spots going to two outsiders who transcended the left-right divide.
Addressing thousands of flag-waving supporters in Paris on Sunday evening, 39-year-old Macron set the tone for the May 7 run-off, saying he aimed to unite "patriots" against "the threat of nationalists."
The anti-immigration, anti-EU Le Pen, who campaigned as the candidate "of the people", said voters faced a choice between "runaway globalisation" and a protectionist France.
The 48-year-old ex-lawyer gained over a million new voters compared with the 2012 election, securing 7.6 million ballots, a result she hailed as "historic".
But Le Pen's share of the vote was far below a March poll high of 27 percent and there was an air of disappointment in her camp that she missed out on the top spot.
With a slew of leaders from the right and the left rallying behind Macron, the odds are stacked against her.
Polls suggest ex-investment banker Macron would beat her by around 20 percentage points in a final that will not feature a candidate from the mainstream left or right for the first time in six decades.
The conservative Le Figaro daily lamented the defeat of the conservative Republicans, whose scandal-hit candidate Francois Fillon trailed in third with 19.9 percent.
"The unthinkable happened," the paper wrote in an editorial, criticising the right's defeat in an election after they were initially seen as a shoo-in after five years of troubled Socialist rule.
Despite serving as economy minister in the outgoing Socialist government of Francois Hollande, Macron casts himself as an "outsider" and his year-old "En Marche!" ("On the move") movement as revolutionary.
"The challenge is to break completely with the system which has been unable to find solutions to the problems of our country for more than 30 years," Macron said Sunday, already looking past the presidential election to crucial parliamentary elections in June.
There were jubilant scenes at his Paris election party, with Macron's wife Brigitte, who is 25 years his senior, joining him briefly on stage.
The outcome capped an extraordinary campaign in a deeply divided and demoralised France, which has been rocked by a series of terror attacks since 2015 and is struggling to shake off a deep economic malaise.
The French vote was being closely watched as a bellwether for populist sentiment following the election of Donald Trump as US President and Britain's vote to leave the EU.
Throughout the campaign, Macron insisted France was "contrarian" -- ready to elect a pro-globalisation liberal at a time when right-wing nationalists are making gains around the world.
Le Pen seized on a jihadist attack that claimed the life of a policeman on the Champs Elysees in Paris three days before the vote to stress her tough line on immigration and Islam.
But most voters appeared to have taken the threat in their stride.
The euro was up Monday as fears of France pulling out of the single currency and European Union receded.
"Most likely, the French election can mark a turning point for France and Europe," said analyst Holger Schmieding from Berenberg Bank.
Le Pen follows in the footsteps of her father Jean-Marie, who made it through to the 2002 presidential run-off in what was a political earthquake for France.
Le Pen Senior went on to suffer a stinging defeat when mainstream parties closed ranks to keep him out.
Far-right expert Nonna Mayer at Sciences Po university said a Le Pen victory was not impossible, "but it seems unlikely that she will carry the second round".
"If she wins, it will obviously be an anti-Europe, protectionist, exclusionist line that wins and which could have troubling consequences for Europe and France," she added.
Despite Macron's plans to "relaunch the building of Europe", the combined scores of staunch eurosceptics Le Pen, far-left Jean-Luc Melenchon and nationalist Nicolas Dupont-Aignan add up to around 46 percent.
Macron drew immediate support from his defeated rivals from the Socialists and Republicans.
Socialist Benoit Hamon, who won a humiliating 6.35 percent, urged voters to keep out Le Pen as "an enemy of the republic".
Fillon followed suit, saying: "There is no other choice than voting against the far-right."
Fillon was seen as a favourite until January when his campaign was torpedoed by allegations that he gave his British-born wife a fictitious job as his parliamentary assistant.