Ancelotti warns Real Madrid are not past RB Leipzig yet
The record 14-time winners scraped a 1-0 lead in Germany ahead of Wednesday's second leg at the Santiago Bernabeu.
"It's a big opportunity to continue in a very special competition - we have to be at our best, because the tie is not over yet," said the Italian.
"We have a small advantage, but we have to be at our top level from the first minute."
Ancelotti also continued to defend England international Jude Bellingham, who was sent off in La Liga against Valencia on Sunday for remonstrating with the referee.
"He's a player who tries to give everything on the pitch, he's doing very well," said Ancelotti.
"The red card was a mistake - he was a bit frustrated, but he did not say any kind of insult."
Real Madrid midfielder Eduardo Camavinga said he did not understand Bellingham's dismissal.
"He didn't insult anyone, it's very strange. I've never seen that in football, it's very, very odd," said the Frenchman.
Spanish media report Madrid will appeal top scorer Bellingham's red card.
The former Borussia Dortmund man is set to start against Leipzig, aiming to add to his tally of four goals in five Champions League matches this season.
Bellingham missed the narrow away win with an ankle problem and his replacement Brahim Diaz netted the only goal.