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Mandhana forged a 144-run opening wicket stand with Poonam Raut (86 off 134) before skipper Mithali Raj (71 not out) completed an unprecedented seventh consecutive half century in ODIs.
It is India's first win over England in five years as they had all lost all six previous matches to the hosts.
Chasing 282 to win, England failed to build partnership with middle-order batswoman Fran Wilson (81 off 102) emerging as the highest scorer. Her run out proved turning point of the game since England looked crusing when she was at the crease.
Off-spinner Deepti Sharma took three wickets for 47 runs.
Tammy Beaumont (14) and Sarah Taylor (22) gave England a decent start adding 33 in 8 overs but Shikha Pandey removed the openers and Deepti Sharma dismissed Natalie Sciver (18) as England slipped to 67 for 3 in the 18th over.
Heather Knight (46) and Wilson took the team across the 100-mark. But Knight was back into the hut in the 32nd over after being run out by Harmanpreet Kaur.
Three overs later, Danielle Wyatt was caught and bowled by Sharma as England lost half their side.
Wilson then in company of Katherine Brunt (24) tried to keep them in the hunt as the duo added 62 runs but both of them were run outs to dash England's hopes.
Earlier, Indian openers Mandhana and Raut batted for 26.5 overs. While Raut was solid at the other end, Mandhana was out to attack from the word go.
The southpaw's onslaught began when she smashed Katherine Brunt for four consecutive boundaries in the fourth over.
Mandhana was a last-minute inclusion to the squad after she recovered from an Anterior Crucial Ligament (ACL) injury she suffered during the Women's Big Bash in January.
The 20-year-old during her whirlwind effort showed what she was worth the selection.
She can hit not only the fours at will but also the big hits. Mandhana mostly stayed on the back foot in her free flowing knock. Her first six came as she sat back on backfoot to hammer it over wide long-on.
She was majorly responsible for giving India a flying start as the team reached 59 in 10 overs.
Mandhana was dismissed in the 27th over, missing out on a well deserved century. Her innings comprised 11 fours and two sixes.
Captain Raj then joined Raut in the middle and carried on
With her rich vein of form to take India to a competitive total.
Raj smashed eight fours in her 73-ball knock before getting out off the last ball of the innings.