Michael (62’) and Aleksandar Mitrovic (85’) scored for Al-Hilal.
Mumbai City FC were reduced to 10 men in the 54th minute when Mehtab Singh received a second yellow card.
Al-Hilal are on top of the AFC Champions League Group D table with 10 points from four matches.
Mumbai City FC’s next match in the AFC Champions League is against Nassaji Mazandaran on November 28.
Mumbai City FC are making their second successive appearance in the Asian Champions League.
Last season, Mumbai City FC won two matches on their debut ACL campaign but failed to make the knockouts.