Airbus and Northrop Grumman's KC-30 design won the prize
Boeing's loss of a $40bn contract to build a new in-flight refuelling aircraft for the US military has drawn angry protests in Congress.
Lawmakers from Washington state and Kansas, which have big Boeing plants, voiced "outrage" that it had gone to a consortium including Europe's Airbus.
The planes will be assembled in Alabama but constructed largely in Europe.
Boeing has said it is awaiting an explanation from the military before deciding whether or not to appeal.
The new aircraft, named the KC-45A by the US Air Force, is based on the Airbus A330 and will be manufactured in partnership with US defence firm Northrop Grumman.
Its job will be to refuel the vast array of US warplanes and the contract is worth in the region of $40bn over 15 years.
It is a huge blow for Boeing, the BBC's Vincent Dowd reports from Washington.
America has around two-thirds of all such aircraft in use anywhere, and a senior figure in the company said recently if it lost this contract it could be out of the refuelling market totally for years.
Gen Arthur J Lichte, commander of the US Air Force's Air Mobility Command, said the winning design had many advantages over Boeing's tanker.
The average age of current US refuelling planes is nearly 50 years
"More passengers, more cargo, more fuel to offload, more patients that we can carry, more availability, more flexibility and more dependability," he said.
In Everett, Washington state, a few dozen Boeing workers protested outside a Machinists Union hall holding up signs saying "American workers equal best tankers" and "Our military deserves the best".
Congressional lawmakers from the state's Seattle area issued a joint statement condemning the "outsourcing" of the contract.
"We are outraged that this decision taps European Airbus and its foreign workers to provide a tanker to our American military," they said.
Todd Tiahrt, a Republican congressman from Wichita, Kansas, called for "an American tanker built by an American company with American workers".
"I hope the Air Force reverses its decision," he added.
But the news was a boon for Alabama Republican congressman Jo Bonner.
"We are so very excited about having the opportunity to help the Air Force acquire the most modern and capable refuelling tanker - a tanker assembled in America by Americans," he said.
The deal will also safeguard thousands of British aviation jobs, the BBC's Andy Moore says. Wings will be made at factories in Bristol and in North Wales.
For Airbus's parent company, the European Aeronautic Defence and Space Company (EADS), it is a long-desired and potentially crucial breakthrough into the US market, our correspondent says.
Boeing's KC-767 design had been widely predicted to win
Replacing America's ageing KC-135 refuelling planes - which date back to the 1950s - has proved controversial, he notes.
In 2002, the Air Force negotiated a $23bn deal with Boeing for 100 tankers to be based on the Boeing 767.
But that deal was declared invalid after allegations of fraud.
Two Boeing executives went to jail and eventually Boeing's chief executive resigned.
Political pressure on the Air Force over the deal was led by Sen John McCain, the front-runner to win the Republican nomination for the presidential elections this year.
Our correspondent adds that two further contracts are expected later as the US Air Force replaces the rest of its ageing fleet of refuelling craft.