Mudiay averaged 18 points, 6.3 rebounds and 5.9 rebounds in 10 games for the Guangdong Southern Tigers of the Chinese Basketball Association in 2014-15.
He originally committed to attend SMU before turning pro.
The 6-foot-5, 200-pound Mudiay was born in the Democratic Republic of Congo in 1996 and moved to Dallas with his two brothers in 2001.
The pick was Denver's highest since selecting Carmelo Anthony third overall in 2003.
The Nuggets missed the playoffs the last two seasons after reaching the postseason 10 straight years.