Last season’s beaten finalists went down 2-1 to their German counterparts at the Red Bull Arena.
Dominic Szoboszlai and Andre Silva established a two-goal lead for the hosts before Riyad Mahrez scored what proved to be a consolation for Man City, who finished the game with ten men after Kyle Walker was sent off in the 83rd minute.
Man City nonetheless topped the group, finishing a point clear of second placed Paris Saint Germain, who beat Club Brugge 4-1 at the Parc des Princes.
"In the first half we lacked rhythm, we had problems connecting and they have a really good team – we knew from before the group stage," Guardiola told reporters.
"The second half was much better but unfortunately we made one or two mistakes and they punished us.
"We played better in the second half. We were more aggressive, we played to win the game and we lost. Congratulations to Leipzig.
"We made an incredible group stage, we qualified with one game left from a tough group, so I am more than satisfied with the performance in every single game and in February hopefully we can arrive in the best condition possible."
