Award show footage courtesy of Directors Guild of America/ "The Hurt Locker", Courtesy of Summit Entertainment
Kathryn Bigelow has been named best director by the Directors Guild of America for The Hurt Locker - a key indicator of Oscar success.
It was the first time a woman had been given the honour in the ceremony's 62-year history.
Bigelow downplayed the achievement, saying: "I suppose I like to think of myself as a film-maker."
She will now be pitted against her ex-husband, James Cameron, in the race to the Academy Awards in March.
But only six times in the history of the Directors Guild awards has the winner failed to take an Oscar for best director.
The Hurt Locker was also a surprise winner at the Producers Guild of America Awards last week.
Bigelow said the win was "the most incredible moment of my life"
Cameron's Avatar had previously been regarded as the favourite after taking home best picture and best director honours at the Golden Globes.
The two films are literally worlds apart. The Hurt Locker is a low-budget drama about a bomb disposal expert in Iraq, which barely made back its $11m (£6.9m) budget at the box office.
Avatar, by contrast, is a dazzling sci-fi epic, set on the distant planet of Pandora, largely created by computer graphics.
It reportedly cost more than $300m (£188m) to make - but its box office receipts are edging towards $2bn (£1.25bn).
The two directors were married from 1989 - 1991, but there appears to be little animosity between them.
As he accepted the Golden Globe for best director last month, Cameron said: "Frankly, I thought Kathryn was gonna get this. And she richly deserves it."
At the Directors Guild awards, Bigelow was up against Quentin Tarantino for Inglourious Basterds, Jason Reitman for Up in the Air, Lee Daniels for Precious and Cameron for Avatar.
She said the win was "kind of the pinnacle for the already wild ride The Hurt Locker has put me on".
The Hurt Locker was mainly shot in Jordan
The film's star, Jeremy Renner, called Bigelow "a warrior, my champion and the most fortunate actor's director".
Tarantino praised her as "queen of directors".
He added that his fellow nominees had been spending so much time together at awards ceremonies, they had become "like a superstar rock band and we're going to go on tour together".
Other prizes from the Directors Guild went to TV drama Mad Men, directed by Lesli Linka Glatter, and comedy series Modern Family, from Jason Winer.
Ross Katz was honored for the HBO movie Taking Chance, and Louie Psihoyos' film The Cove won the documentary award.
Pop diva Cher presented Norman Jewison with a Lifetime Achievement Award for his career in film that included such hits as In the Heat of the Night and Fiddler on the Roof.
Nominations for this year's Oscars are to be revealed on Tuesday. The awards will be handed out in Hollywood on 7 March.