The Cityzens will entertain the Blues at the Etihad Stadium on 9 November, with both sides aiming for a spot in the fourth round of the Carabao Cup.
Grealish, 27, starts in attack and will be looking to impress ahead of the 2022 FIFA World Cup, with England's squad set to be announced tomorrow.
The English attacker has made 15 appearances across competitions, scoring just one goal.
Grealish arrived at Manchester City from Aston Villa in 2021 for £100 million, becoming the most expensive British player in history.
He made 39 appearances across competitions last season, scoring six goals and providing four assists.
It's fair to say that the forward is yet to truly live up to expectations, and a game like tonight might be the perfect opportunity for him to impress.
Meanwhile, Mahrez, 31, joins Grealish in attack, and he needs to make the most of his game time with extensive competition for places in Guardiola's team.
The Algerian winger has made 16 appearances this season, scoring three goals and providing an assist.
They are joined by Argentinian youngster Julian Alvarez, who has been in fine form in the absence of Erling Haaland.
Cole Palmer, Ilkay Gundogan, and Rodri are in midfield, while Rico Lewis, Ruben Dias, Aymeric Laporte, and Sergi Gomez are in defense.
German shot-stopper Stefan Ortega starts in goal.
Here are some reactions from fans on Twitter to Guardiola's decision to start Grealish and Mahrez:
Manchester City manager Guardiola wants Chelsea attacker Raheem Sterling to receive a good reception
Sterling is set to face Manchester City for the first time since leaving the club this past summer.
The English forward departed the Etihad Stadium and headed to Stamford Bridge for £47.5 million.
He won the Premier League four times, the FA Cup once, and the Carabao Cup on four occasions during his time at the Etihad.
Players who return to face their former sides are often given an unsavory reception.
However, Guardiola hopes that the Manchester City fans will give their former attacker a warm welcome when he takes the Etihad pitch in Chelsea colors.
“Maybe you forget, what happened in the last months, but that is not the reality of what happened in a period of six, seven years he was here."
“He deserves (a good reception), of course. Of course we want to beat them, but of course he has to get a good reception. I think in England the people appreciate that.”
Sterling has managed five goals and two assists across competitions for the Blues this season.
Chelsea fans will hope he is at his best against his former side in a competition where he has managed 10 goals and nine assists in 29 appearances.