In its report summary, the non-partisan office said raising the minimum wage from its current $7.25 per hour would lift some workers and their families above the federal poverty threshold but put other people out of work.
The CBO said about 16.5 million low-wage workers would see a bump in pay.
The CBO said raising the minimum wage to $10.10 would have "substantially larger" effects on employment and income than hiking it to $9 an hour, but "the net effect of either option on the federal budget would probably be small."
"Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent," the CBO projects. "As with any such estimates, however, the actual losses could be smaller or larger."
The agency said its best guess is there is a two-thirds chance the effect would range from "a very slight reduction in employment and a reduction in employment of 1.0 million workers."
The National Employment Law Project said the CBO is wrong in its projections.
"Today's Congressional Budget Office report is an outlier that flies in the face of overwhelming empirical evidence," NELP Executive Director Christine Owens said. "The effect of raising the minimum wage is one of the most thoroughly studied topics in modern economics, and the vast majority of the more than 1,000 estimates contained in studies dating back to 1972 show no significant adverse effects on employment.
"In fact, more than 600 economists, including seven Nobel laureates, have signed a letter in support of raising the federal minimum wage, arguing that it will actually improve our economy and create jobs.
"As President Obama and more than 70 percent of Americans, including many small business owners, agree, Congress must pass legislation to raise the minimum wage now."
The White House blog carried a post by Jason Furman, chairman of the Council of Economic Advisers, and council member Betsey Stevenson who homed on the CBO's that 16.5 million low-wage earners would make more money and downplayed the projected loss in jobs.
"On employment, CBO's central estimate is that raising the minimum wage to $10.10 per hour would lead to a 0.3 percent decrease in employment and CBO acknowledges that the employment impact could be essentially zero," Furman and Stevenson said. "But even these estimates do not reflect the overall consensus view of economists which is that raising the minimum wage has little or no negative effect on employment."