A total of 767,000 babies were born in France last year -- 17,000 fewer than in 2016, a fall of 2.1 percent.
The death rate has meanwhile gone up -- leaving the difference between births and deaths, known as the rate of natural increase, at a "historic low", national statistics office INSEE said.
It is the third year in a row that the number of babies born in France has declined, with the average Frenchwoman now mother to 1.88 children.
France nevertheless remains the European Union's most fertile country ahead of Ireland according to the most recent data available, INSEE said.
French mothers are meanwhile getting older, with the average woman choosing to wait until they are 30.6 years old before having their first child, compared to 29.8 a decade ago.
Like other Western countries, France as a whole has an ageing population -- posing a demographic headache since it means fewer people of working age are supporting a growing army of pensioners.
About 19.6 percent of the French population are now aged over 65, INSEE said, compared to 15.5 percent 20 years ago.
The population as a whole, however, went up -- with France home to a total of 67.2 million people as of January 1, making it the European Union's most populous country after Germany.
On the migration front -- a touchy political subject as President Emmanuel Macron looks to stem illegal arrivals -- the country saw 69,000 more arrivals than departures last year.