Second seed Li, who won at Roland Garros in 2011, looked impotent on court Suzanne Lenglen on another chilly day in Paris, following men's Australian Open champion Stan Wawrinka to the Roland Garros exit door.
World number 103 Mladenovic, who won the juniors' title in Paris in 2009, will next face American Alison Riske, looking to make it past the second round on home clay for the first time.
"I don't think I had a bad day," Li told a news conference.
"The problem is myself. I don't think I'm doing well on the court. And also, even during the match, I don't think I followed the game plan, in my mind I didn't have any idea how to play the match."
Once dubbed the next big thing of French women's tennis, Mladenovic saved two set points in the opener, lost focus in the second but stepped up a gear again in the decider to wrap it up on her second match point.
"It's incredible, without you I would not have done it," a tearful Mladenovic told the crowd. "When such a player comes back in the match, you know you will have to seize every opportunity. I have been working hard."
She later told a news conference that her task now was to capitalise on her first-round success.
"If you beat Li Na you don't think about losing in the next round. I'll have big expectations for the next round," she said.
"It can be tough sometimes for us French players to play in front of our crowd, but when you're playing a close game it can be good for us to have the crowd with us. I could feel the atmosphere could make the difference."
The 21-year-old Mladenovic, who has two mixed-doubles grand-slam titles to her name with Canadian Daniel Nestor, traded breaks twice with Li early on, and after saving two set points at 5-4 she went on to break again and clinch the set when her opponent's forehand sailed long after just over an hour's play.
She could not sustain the rhythm in the second set, which Li comfortably bagged following an early break.
Mladenovic broke Li to love in the fourth game of the decider and never looked back, raising her arms in celebration after just over two hours on court, when the Chinese's forehand went long once again.
(Editing by Neville Dalton)
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