The hosts, seeking to put on a good display in front of 39,415 spectators at the Free State Stadium, recorded their first triumph over a major footballing power with first-half goals from Bongani Khumalo and Katlego Mphela.
South Africa's victory eliminated France but it was not enough to keep host country in contention. South Africa, thus, became the first World Cup host team to fail to advance from the first round.
South Africa's Bongani Khumalo and Katlego Mphela scored a goal each in the first half against 10-man France. Florent Malouda pulled one back for the French in the 70th.
Uruguay and Mexico both advanced from Group A. The Uruguayans beat Mexico 1-0 in the other group match.
"I really thought we could pull through," Khumalo said.
Khumalo put Bafana Bafana ahead in the 20th minute when he outjumped France midfielder Abou Diaby to knock a cross from Siphiwe Tshabalala into the net with his shoulder.
Mphela doubled the lead in the 37th, outmuscling defender Gael Clichy to reach a low cross from Tsepo Masilela and shoot the ball across the line.
France, which played with 10 men after Yoann Gourcuff was sent off for elbowing Macbeth Sibaya in the 25th, made it 2-1 when Malouda knocked in a cross from Franck Ribery.
After playing with a lone striker in its first two matches, South Africa coach Carlos Alberto Parreira opted to play two men up front against France — Bernard Parker and Mphela — and it paid off.
Mphela gave the France defense fits, with strong runs and dangerous drives from distance. He nearly scored his second goal of the night in the 43rd with a right-foot drive from 25 meters (yards) that forced a diving save from France goalkeeper Hugo Lloris.
Mphela continued to bother France's backline after the break, and should have scored in the 50th when he ran onto a pass from Steven Piennar, but his right-foot shot hit the crossbar.
The striker went close again five minutes later with a drive from 25 meters (yards) that Lloris punched away.
South Africa's attacking style brought the crowd at Free State Stadium to life, and the home fans roared with each Bafana Bafana foray into the French half.
Facing a 2-0 halftime deficit, France coach Raymond Domenech brought on Malouda and striker Thierry Henry to try to boost his team's flagging attack.
The changes had little impact until Ribery set up Malouda.
France, which the final in 2006, was also knocked in the first round in 2002.
