The Premier League leaders were stung by an early Marquinhos goal as the hosts dominated the first half of a high-quality encounter at the Parc des Princes.
The ball was worked to the Belgian outside the area and he lofted a dangerous cross towards the far post. The dip on the delivery bamboozled PSG and it evaded everybody to bounce into the net.
City sensed their chance and continued to press, winning a free-kick just outside the area. Mahrez stepped up and drilled home a powerful shot as the PSG wall faltered.
PSG’s night then took another turn for the worse as Gueye was shown a straight red card after catching Gundogan on the ankle with a late challenge.
Foden and De Bruyne had late chances to put City in complete command but PSG escaped further damage.