Centrist Mr Macron won about 23.7 per cent of the vote, with the National Front leader on 21.7 per cent. The other candidates conceded defeat by 8pm on Sunday.
The results sets up a duel between a young candidate with no electoral experience and the woman who tried to detoxify a party known for racism and anti-Semitism.
As polls across the country closed, projections put far-left contender Jean-Luc Melenchon and conservative Francois Fillon just behind the front-runners.
The race is seen as a litmus test for the spread of populism and could help determine Europe's future.
The two candidates who secure the most votes in Sunday's first round will contest a May 7 head-to-head run-off ballot.
If Ms Le Pen and Mr Macron's leads hold, it would be the first time in modern French history that no major party candidate has advanced to the final vote.
Supporters of Ms Le Pen and Mr Macron went wild with cheers as the projections were revealed.
"We will win!" Le Pen supporters chanted in her election day headquarters in Henin-Beaumont. They burst into a rendition of the French national anthem, and waved French flags and blue flags with "Marine President" inscribed on them.
Mr Macron supporter Mathilde Julien said "he represents France's future, a future within Europe".
Meanwhile at the base of Mr Fillon in Paris, silence and disappointed sighs rose up as the projections appeared on TV screens.
Socialist candidate Benoit Hamon has conceded defeat after the projections showed him to be in a distant fifth place.
Mr Hamon said as he acknowledged losing the race that "the left is not dead", and he urged voters to back Mr Macron on May 7.
Mr Fillon also conceded defeat, and called on his supporters to now back Mr Macron.
French Prime Minister Bernard Cazeneuve also urged voters to support Mr Macron as he greeted the projections with a call for the defeat of Ms Le Pen's National Front party.
In his speech, Mr Macron praised supporters for a campaign that "changed the course of our country."
Urging hope in a future with Europe instead of fear - a reference to Le Pen's anti-European Union campaign - he declared: "The challenge is to open a new page of our political life."
Many in the jubilant crowd waved both the French tricolor and the European Union flags, chanting, "We will win!"
Ms Le Pen vowed on Sunday to defend France against "rampant globalisation" after she qualified to fight out the second round of the country's presidential election against centrist Emmanuel Macron.
"This result is historic. It puts on me a huge responsibility to defend the French nation, its unity, its security, its culture, its prosperity and its independence," she told supporters.
"The main thing at stake in this election is the rampant globalisation that is endangering our civilisation," she added, urging French voters to shake off the shackles of an "arrogant elite."
In Paris, protesters angry that Ms Le Pen has advanced into the final vote scuffled with police.
Crowds of young people, some from anarchist and "anti-fascist" groups, gathered on the Place de la Bastille in eastern Paris as results were coming in from the first round vote.
Police fired tear gas to disperse an increasingly rowdy crowd and riot police surrounded the area.
Protesters staged demos at several of Ms Le Pen's campaign events, angry at her anti-immigration policies and her party.