Politicians on the left and right immediately urged voters to block Ms Le Pen’s path to power in the May 7 election decider, saying her virulently nationalist anti-EU and anti-immigration politics would spell disaster for France.
“Extremism can only bring unhappiness and division to France,” defeated conservative candidate Francois Fillon said.
“As such, there is no other choice than to vote against the extreme right.”
The selection of Ms Le Pen and Mr Macron presents voters with the starkest possible choice between two diametrically-opposed visions of the EU’s future and France’s place in it.
It sets up a battle between Mr Macron’s optimistic vision of a tolerant France and a united Europe with open borders against Ms Le Pen’s darker, inward-looking “French-first” platform that calls for closed borders, tougher security, less immigration and dropping the shared euro currency to return to the French franc.
With Ms Le Pen wanting France to leave the EU and Mr Macron wanting even closer co-operation among the bloc’s 28 nations, Sunday’s outcome means the May 7 run-off will have undertones of a referendum on France’s EU membership.
The absence in the run-off of candidates from either the mainstream left Socialists or the right-wing Republicans party - the two main political groups that have governed post-war France - also marked a seismic shift in French politics.
Mr Macron, a 39-year-old investment banker, made the run-off on the back of a grassroots campaign without the support of a major political party.
With 90 per cent of votes counted, the Interior Ministry said Mr Macron had nearly 24 per cent, giving him a slight cushion over Ms Le Pen’s 22%.
Mr Fillon, with just under 20 per cent, was slightly ahead of the far-left’s Jean-Luc Melenchon, who had 19 per cent.
While Ms Le Pen faces the run-off as the underdog, it is already stunning that she brought her once-taboo party so close to the Elysee Palace.
She hopes to win over far-left and other voters angry at the global elite and distrustful of the untested Mr Macron.
In his election day headquarters in Paris, Mr Macron promised to be a president “who protects, who transforms and builds”.
His wife Brigitte joined him on stage before his speech.
Ms Le Pen declared that she embodied “the great alternative” for French voters.
She portrayed her duel with Mr Macron as a battle between “patriots” and “wild deregulation”, warning of job losses overseas, mass immigration straining resources at home and “the free circulation of terrorists”.
“The time has come to free the French people,” she said at her election day headquarters in the northern French town of Henin-Beaumont, adding that nothing short of “the survival of France” would be at stake in the presidential run-off.
France is now steaming into unchartered territory, because whoever wins on May 7 cannot count on the backing of the country’s political mainstream parties.
Even under a constitution that concentrates power in the president’s hands, both Mr Macron and Ms Le Pen will need legislators in parliament to pass laws and implement much of their programmes.
France’s legislative election in June now takes on a vital importance, with huge questions about whether Ms Le Pen and even the more moderate Mr Macron will be able to rally sufficient MPs to their causes.
In Paris, protesters angry at Ms Le Pen’s advance - some from anarchist and anti-fascist groups - scuffled with police, who fired tear gas to disperse them.
Two people were injured and police detained three people as demonstrators burned cars, danced around bonfires and dodged riot officers.
At a peaceful protest by around 300 people at the Place de la Republique, some sang “No Marine and no Macron!” and “Now burn your voting cards”.
Mr Fillon said he would vote for Mr Macron on May 7 because Ms Le Pen’s programme “would bankrupt France” and throw the EU into chaos.
In a defiant speech, Mr Melenchon refused to concede defeat before the official count confirmed pollsters’ projections and did not say how he would vote in the next round.
In a brief televised message, Socialist prime minister Bernard Cazeneuve urged voters to back Mr Macron to defeat the National Front’s “funereal project of regression for France and of division of the French”.
Socialist presidential candidate Benoit Hamon, who was far behind in Sunday’s results, quickly conceded defeat, but proclaiming that “the left is not dead”, also urged supporters to back Mr Macron.
Voting took place amid heightened security in the first election under France’s state of emergency, which has been in place since gun-and-bomb attacks in Paris in 2015.
On Thursday, a gunman killed a police officer and wounded two others on Paris’ Champs-Elysees boulevard before he was shot dead.