Trailing at the break to a first-half Marquinhos header, Pep Guardiola’s side staged a stunning turnaround after the break at the Parc des Princes.
On a night of high drama the hosts were then reduced to 10 men when Idrissa Guye was sent off for a blatant foul on Ilkay Gundogan.
And City deservedly held firm to seal a famous and crucial victory - one of the finest in our European history.
Of course, it's still only half-time in the tie - but tonight's result will put us in great heart ahead of next Tuesday’s decisive second leg.
The mutual respect between the sides that was evident in the build-up was mirrored in an absorbing encounter featuring football of the highest quality.
It was PSG offered an early sign of their potent threat on the counter when City lost possession and a quicksilver attack ended with Kylian Mbappe feeding Neymar who drilled in a low shot straight at Ederson.
The Brazilian keeper then had to be alert again to deny compatriot Neymar once more after some dazzling footwork from the striker opened up a fraction of space in the box before he fired in a snap-shot.
The danger signs were there with the hosts denying City time and space – and it was PSG who drew first blood on 16 minutes.
Angel Di Maria whipped in a vicious inswing corner and Marquinhos timed his run to perfection to guide home a powerful header into the bottom corner of the net that gave Ederson no chance.
It was a test of character for Guardiola’s side but City almost conjured up a spectacular instant riposte.
A pin-point 45-yard cross ball from Joao Cancelo found the advancing Bernardo charging in at the far post and PSG ‘keeper Keylor Navas needed to be alert to keep the effort out at the near post.
In what was a compelling end-to-end encounter, PSG’s set-piece delivery was a menacing outlet and Parades sent another header a fraction wide from Neymar’s corner.
Stones earned his corn with a vital block to halt Bakker as PSG summoned up another lightning counter before Mahrez followed suit, timing a defensive touch to perfection to halt Neymar as he shaped to shoot from five yards before City conjured up our best chance two minutes before the break.
As so often, the half time message from the boss proved revelatory.
There was an extra spring and intensity to City’s work after the restart with Guardiola’s men constantly probing and asking more questions of the hosts and dominating possession.
And a piece of De Bruyne magic almost brought us level on the hour, the skipper’s spectacular overhead kick whistling a fraction over the target.
Another brilliant City counter saw Kyle Walker power 60 yards up field and feed an inviting cross but no-one was there to finish.
But the all-important goal we sought and merited finally arrived on 65 minutes – and, as so often, it was the skipper who delivered.
Receiving the ball from a short corner De Bruyne launched a hopeful 25 yard ball into the box and Navas fatally hesitated waiting for a touch that never came, the ball instead curing into the corner of the net.
It was a huge moment both on the night and in context of the overall tie.
And a promising night suddenly got even better on 70 minutes as Mahrez fired us ahead from a free-kick.
The Algerian exploited a gap in the PSG defensive wall and sailed past Navas to give us a precious lead.
It was no less than we deserved and with PSG losing their heads, Idrissa Gueye was shown a straight red card for a poor challenge on Gundogan.
But it was a wonderful night and one of City's great European displays.
CITY: Ederson, Walker, Dias, Stones, Cancelo (Zinchenko 60), Rodrigo, Gundogan, De Bruyne ©, Bernardo, Foden, Mahrez
SUBS: Steffen, Trafford, Ake, Sterling, Jesus, Aguero, Laporte, Torres, Mendy, Fernandinho, Garcia
PSG: Navas, Florenzi, Marquinhos (c), Kimpembe, Bakker, Gueye, Paredes (Herrera 82), Di Maria (Diallo 75), Verratti, Neymar, Mbappe
SUBS: Rico, Kehrer, Icardi, Rafinha, Danilo, Kean, Sarabia, Kurzawa, Diallo, Draxler, Dagba
Man of the match
Riyad Mahrez goes from strength to strength. The Algerian winger was again immense in all areas, capping another tremendous display with that crucial free kick.
He also married his trademark attacking work with some sterling defensive blocks. The ultimate team man.
Taste for travel
City have now won each of our last 18 away games across all competitions.
It’s a remarkable stat and one that illustrates the sheer quality and consistency of Guardiola’s squad.
This one though felt the biggest of the lot!
"It was a game of two halves, we started well the first ten minutes and had some control.
"But they are a team with great quality of front. It was a shame the way we conceded. After 25 minutes, we changed the way we pressed and it became better. We had some chances.
"But the second half was much better, we put them under pressure the first goal was lucky the way it went in but we did well."
"We started really well and then conceded a goal, we felt the pressure. That’s normal. For a lot of people, it is our first time in semi finals and they want to do well. Last ten minutes of the first half was good and second half was good but we have a hard job in six days.
"Sometimes you need time to be relaxed and be ourselves. First half it’s normal. We changed a little bit the way we pressed. We more aggressive. Last 10 minutes of first and then second half, we were more aggressive.
"So satisfied with the performance but it’s half way. We still have 90 minutes to beat them and with PSG anything can happen."
What it means
Thanks to those vital second half strikes, it’s advantage City ahead of next Tuesday’s second leg decider at the Etihad.
It means the pressure and onus will be on the visitors with City knowing we are in the driving seat as we seek to book our final ticket.
But there is still plenty of work to do given PSG's quality
City return to domestic duty on Saturday when we travel to Crystal Palace for another vital Premier League clash.
Ten points clear at the top of the table with five matches remaining, kick-off at Selhurst Park is at 12.30pm and a victory would see Pep Guardiola’s side take a huge step towards regaining the title.
Indeed, if we were to win and Manchester United then lose at home to Liverpool on Sunday, City would be crowned champions for the third time in four seasons.
News about Paris Saint-Germain v Man City"
De Bruyne: We were rewarded for our patience
Kevin De Bruyne insisted City’s patience in possession was a crucial factor behind our second half comeback against Paris Saint-Germain. Read more
PSG 1-2 City: Full-match replay
Watch the entire 90-minutes of Manchester City's 2-1 win over Paris Saint-Germain in the first leg of our Champions League semi-final on CITY+. Watch more
Mahrez revels on the big stage - Guardiola
Pep Guardiola hailed Riyad Mahrez as ‘a guy who doesn’t feel the pressure’ in the wake of another superb display by the City winger in our hugely impressive 2-1 Champions League semi-final first leg win at Paris Saint-Germain. Watch more
Crucial result in Paris | First-leg semi-final win over PSG | Man City Podcast Episode 47
City fought back from a goal down to clinch a superb Champions League semi-final first leg win at Paris Saint-Germain on Wednesday evening. Watch more
Guardiola reveals admiration for his team after second-half masterclass
Pep Guardiola has spoken of his admiration for his players after their outstanding second-half performance in France saw us establish a 2-1 first-leg lead against Paris Saint-Germain in our Champions League semi-final. Read more
Dickov hails character of 'world-class City' after PSG victory
Paul Dickov saluted the character as well as the quality of ‘world-class’ City in the wake of Wednesday’s superb 2-1 Champions League semi-final first leg win at Paris Saint-Germain. Read more
Mahrez: I meant to go around the wall!
Riyad Mahrez admitted that he slightly miscued the free-kick that sealed our 2-1 Champions League semi-final first leg triumph away to Paris Saint-Germain. Watch more
Gallery: A memorable night in the City of Light!
Relive the best of the action from a hard fought Champions League semi-final first leg victory, where goals from Kevin De Bruyne and Riyad Mahrez saw City beat PSG 2-1. View more
Paris Saint-Germain 1-2 Man City: Match stats and reaction
Manchester City face Paris Saint-Germain at the Parc des Princes on Wednesday 28 April and kick-off is at 20:00 (UK). Read more
PSG 1-2 City: Match highlights
Enjoy the best of a memorable night in Paris... Watch more