The meeting continues one of Europe's most compelling modern rivalries. The clubs have faced each other 15 times since 2012, with both sides winning five matches and the remaining five ending in draws. Another close contest is expected as the teams battle for a place in the quarter-finals over two legs.
Guardiola believes the key for City is to approach the challenge without fear while staying faithful to the principles that have defined his side.
"You never know what is going to happen in this competition, but good things cannot happen if you are not who you are," Guardiola said. "You have to face the opponent with incredible respect, look in their eyes and say: 'This is who we are as a team.'
"It is 180 minutes and there will be moments for both teams. The more you control their good moments, the better. We have to try to earn the ticket. I want to deserve to be in the next round and the only way is to be who we are."
City's manager emphasised that his team must remain proactive, particularly in regaining possession and avoiding mistakes against opponents who are ruthless in punishing errors.
"Being proactive to regain the ball, and when we cannot attack quickly because of their quality, then drop back as a team," he said. "Don't make many mistakes because this competition punishes you a lot. The objective is simple - play better than the opponent."
Guardiola also reflected on past Champions League experiences, including painful eliminations, which he believes helped shape the side that eventually lifted the trophy in 2023.
"The year we won, we didn't even play a good final," he said, referring to City's 1-0 victory over Inter Milan. "But that team had suffered experiences that helped it grow. Losing against Real in the last minutes before or going out against Tottenham in 2019 - many times we were outstanding and still went out. You have to live those moments."
Despite that triumph, Guardiola acknowledged that much of the current squad lacks experience in such high-stakes European ties.
"Maybe 60 or 70 percent of the squad are new players," he said. "A lot of them haven't played this kind of test and we have to see how we react."
City arrive in Madrid with close to a full squad, in contrast to last season when injuries and fatigue hampered their preparations.
"This season we have the squad," Guardiola said. "Last season we arrived with a lot of fatigue and few players available. We know we have to give a top performance so we can take something positive into the second leg with our people in Manchester."
Real Madrid, meanwhile, are dealing with several injury concerns. Kylian Mbappe, Jude Bellingham and Rodrygo are among the notable absentees, although Guardiola refused to underestimate the Spanish giants.
"Real Madrid is always Real Madrid," he said. "It doesn't matter how many theories we have. I respect this club and I know how difficult this competition is."
Guardiola singled out Vinicius Junior as a major threat even without some of Madrid's other stars.
"He is a constant danger," Guardiola said. "We used to have Kyle Walker to deal with him. We will try to stay together, especially on the ball, and try not to lose it often."