France defeated New Zealand at the World Rugby Seven Series in Kitakyushu to end their record 38-game unbeaten run.
The Kiwis were on track to break their own record for consecutive victories after defeating hosts Japan 43-0 in Pool A at Mikuni World Stadium.
A 17-17 draw with Russia saw New Zealand instead shift to an unbeaten run, which France ended with their first victory against the Black Ferns Sevens.
"It's pretty much a day we would love to forget," said New Zealand captain Sarah Hirini.
"It was a tough loss.
"We won't blame anyone but our own team performance and we know we have a lot to work on."
The defeat set up a tricky quarter-final clash for New Zealand against the United States, with the teams first and second in the World Series rankings, respectively.
The Americans comfortably defeated England 43-7, triumphed 31-5 against Fiji and narrowly beat Ireland 15-12 to progress.
Canada also recorded three victories, the most impressive a 17-14 win against Olympic champions Australia.
They will play Russia in the next round.
The quarter-finals, semis and final are due to take place tomorrow.