British director Ken Loach's The Wind That Shakes The Barley has won the Palme d'Or - the top prize at the Cannes film festival.
The film, about Ireland's struggle for independence, beat 19 others to the prestigious prize.
Hong Kong director Wong Kar Wai, who led the jury, said his panel had looked for films which reflected "compassion, hope, bonding and solidarity".
Other jurors included actors Tim Roth, Samuel L Jackson and Monica Belluci.
Wong said the jury's decision had been a unanimous one.
British actress Helena Bonham Carter, who was also on the jury, said Loach's film "hit us all profoundly".
"It was one of five films about war and it was a fantastic education about the Irish problem," she added.
"There was a tremendous humanity. I can't explain our mass reaction but we were all profoundly moved."
Loach, 69, has said the film, which describes the early days of the IRA in the 1920s from an Irish perspective, is also a critique of the US-led invasion of Iraq.
"Maybe if we tell the truth about the past, maybe we tell the truth about the present," he said as he accepted the award.
Loach thanked the jury of "the most wonderful festival of cinema in the world".
Penelope Cruz shared the best actress award with her Volver co-stars
"Our film is a little, a very little step in the British confronting their imperialist history," he said.
28 Days Later star Cillian Murphy leads the cast, which also includes Padraic Delaney, Liam Cunningham and Orla Fitzgerald.
Loach has been nominated for the Palme d'Or on seven previous occasions, but this is the first time he has won the main prize. He won the jury prize in 1990 for Hidden Agenda, about a British army shoot-to-kill policy in Northern Ireland. His is the first UK film to win the Palme d'Or since Mike Leigh's Secrets and Lies in 1996.
There was also success for another UK director, Andrea Arnold. Her debut feature, Red Road, won a special jury prize.
Warwickshire-born Loach said after the ceremony: "This is very good for British cinema. I hope it encourages people in our film industry to remember we are part of world cinema and to not just look across the Atlantic."
Among the 19 films he beat to the prize were the two favourites, Volver by Spanish director Pedro Almodovar, and Babel by Mexican film-maker Alejandro Gonzalez Inarritu.
Inarritu took the best director's prize for his film, which was shot in four different languages.
Loach's film recounts the early days of the Irish Republican Army
The entire female cast of Volver - led by Penelope Cruz - were collectively awarded the best actress honour, while Almodovar won best screenplay.
The best actor prize was given collectively to the French-Arab cast of Days of Glory, led by actor and comedian Jamel Debbouze, best known for his role in 2001's Amelie.
Directed by Rachid Bouchareb, it describes the treatment of North African soldiers who fought for France in World War II.
The Grand Prix runner-up prize was taken by French film-maker Bruno Dumont's Flanders, a portrayal of the effects of war on a young farmer.
Both UK winners had backing from the National Lottery. Paul Trijbits, head of the UK Film Council's New Cinema Fund, which distributes lottery money to film-makers, called Ken Loach and Andrea Arnold's success "an outstanding testament to their talent, creativity and vision".
The awards ceremony ends the world's leading film festival, which began on 17 May with the premiere of The Da Vinci Code.