Pottery artist Grayson Perry, who creates vases depicting subjects like death and child abuse, has won this year's Turner Prize.
Perry wore a £2,500 dress to Sunday's ceremony
Perry accepted the award in a dress, as his female alter-ego Claire, thanked his wife and said he was "stunned".
A popular choice among the public, he beat off competition from the favourites, the Chapman brothers.
The other artists competing for the £20,000 prize were video artist Willie Doherty and sculptor Anya Gallaccio.
Wearing a purple dress with large bows and frills, Perry told a ceremony at the Tate Britain gallery in London: "Well, it's about time a transvestite potter won the Turner Prize.
"I think the art world had more trouble coming to terms with me being a potter than my choice of frocks.
"Really I only want to thank one person, that's my wife Philipa because she's been my best sponsor, editor, support and mainly my lover."
His vases include We've Found The Body Of Your Child, which shows a baby lying helpless on the ground while its mother is apparently restrained by a gang.
He also pokes fun at the art world with works like Lovely Consensus, a satire on fashionable establishments.
His wife, a psychotherapist, read the body language of the other nominees and convinced him he was going to lose, Perry said.
His £2,500 dress was decorated with rabbits, frowning hearts and the words "Sissy" and "Claire".
It depicted an inversion of a happy childhood - a common theme in his work - he told reporters.
Tate director and award judge Sir Nicholas Serota said Perry had not won just because he had made ceramics fashionable.
"I don't think the choice is a strategic choice, I think the jury felt strongly that these were the works of a very strong artist who happens to be using ceramics and drawing," he said.
"I don't think this is the year of the pot."
Grayson Perry with wife Philipa (right) and daughter Flo
The prize is open to British artists aged under 50 who are judged on their exhibitions in the last 12 months.
It stirs an annual debate about the merits of often shocking modern art, and what constitutes good art.
Controversial brothers Jake and Dinos Chapman had been the bookmakers' favourites, and had stolen the headlines as the most shocking nominees.
One of their nominated works, titled Sex, was a sculpture depicting bodies being picked at by maggots. Another, called Death, was a bronze sculpture of a pair of blow-up dolls engaged in a sex act on a lilo.
Also shortlisted was Anya Gallaccio, who used natural objects like apples and flowers - which rotted since an exhibition of the nominees' art opened in October.
And Willie Doherty was nominated for his video Re-Run, in which a man was seen running across a bridge at night from two angles - but never reaching the other side.
The award was presented by pop artist Sir Peter Blake, best-known for creating the Beatles' Sergeant Pepper album sleeve.
Last year, arts minister Kim Howells described the nominated artworks as "cold, mechanical, conceptual bullshit".
One of this year's judges, Chrissie Iles, said they had to choose the "first amongst equals" and the five-strong judging panel had "a lot of debate".
Earlier, a public poll to mark the awards' 20th anniversary found that sculptor Anish Kapoor was the most popular winner of the last two decades.
"I'm either doing something very right or very wrong," he said.
Last year's winner was Keith Tyson, who famously cast a fast food meal in lead.