Bidding for a record-extending 15th Champions League title, the Spanish and European champions came from behind to complete a 5-2 win at Anfield last month.
But Ancelotti said that his players will not forget that they had to fight back from two goals down to earn their win and that Liverpool are well capable of springing a dramatic Champions League upset at the Bernabeu on Wednesday.
"We have to start the game better than we did at Anfield. Find the balance between defence and attack because we saw what happened there in the first 15 minutes," Ancelotti told a news conference.
"We must not fall asleep and find the right balance and don't play with the result in our minds. We are not only going to go out there and defend, we have to make our fans happy.
"So we will step on the field focused from minute one and will play for the win. There is no other way around."
Also fresh in Ancelotti's mind is last season's quarter-final against Chelsea, when Real won the first leg 3-1 in London but fell behind 3-0 at home, having to fight back to secure a 3-2 result that ensured their place in the semi-finals.
"The Chelsea game is very much alive in our minds," Ancelotti said.
"It will help us to play a different game (on Wednesday)... We are not going to play a closed game, but play our best offensive soccer. The players understand that. That's why I think it will be an open game.
"We have to do both things well: defend and attack, but we're thinking more about attacking."
Defender Antonio Rudiger, who was a Chelsea player last season, agreed with his manager about the attitude the team needs to take.
"We have to approach the game better than we did in Anfield, we can't afford to fall asleep, we saw what happened," Rudiger said.
"When you play against Real Madrid you feel something different in the atmosphere of the Santiago Bernabeu stadium.
"For me it's an honour to be here and to play with teammates of the level of (Karim) Benzema and (Luka) Modric. We will play our best to advance."
