In what will be the first meeting between the sides, Real will hope to improve on a dismal return of just one victory from 25 trips to face German opposition on home soil.
Schalke have been in impressive form of late, taking 13 points from 15 available since the Bundesliga's winter break, and Ancelotti is wary of the problems they could cause going forward.
In particular, former Real striker Klaas-Jan Huntelaar, who spent half a season at the Santiago Bernabeu in 2009, is a player his side will need to keep quiet.
"It will be a game with a lot of intensity because Schalke will give it their all," said Ancelotti, who also confirmed that Gareth Bale, Karim Benzema and Cristiano Ronaldo would start at the Veltins Arena.
"Schalke have a lot of quality and are well organised. We have to do our best to win.
"They have young players - (Max) Meyer, (Julian) Draxler - with lot of quality and players with experience like Huntelaar and (Kevin-Prince) Boateng.
"They're a solid team, not spectacular but well organised defensively and all working together. A team with quality.
"(The match) is not Ronaldo versus Huntelaar, it's between two teams, but Huntelaar is dangerous."
Ancelotti also insisted that Sunday's La Liga clash with title contenders and city rivals Atletico Madrid would not act as a distraction.
"I'm here to do my best in all competitions but the Champions League is the most important and difficult," he continued.
"All the remaining games are important and that's why we prepare for each in the same way.
"Arriving to the semi-finals three times (in the last three years) is not easy. We are excited to improve on that."
