UN nuclear agency director and Nobel Peace Prize winner Mohamed ElBaradei has said the award will give him and his organisation a "shot in the arm".
Mr ElBaradei said the peace prize would act as a spur to tackle nuclear crises in Iran and North Korea.
The award was given jointly to Mr ElBaradei and the International Atomic Energy Agency (IAEA), which he heads.
He was congratulated by US Secretary of State Condoleezza Rice, whose country opposed his re-appointment.
Ms Rice said the Bush administration was committed to working with the IAEA to prevent the spread of nuclear weapons technology.
Washington has previously criticised Mr ElBaradei for being too soft on Iran, and opposed him when he stood for a third term as head of the agency in September. The complaint was later withdrawn.
'Very strong message'
An emotional Mr ElBaradei told journalists he was humbled by the award, which had come as a complete surprise. He had been watching the ceremony at home on live TV.
"The award sends a very strong message: 'Keep doing what you are doing'," he said.
"We continue to believe that in all of our activities, we have to be impartial, objective and work with integrity."
"Overall my colleagues and I will go to sleep tonight with a good feeling of satisfaction that finally our effort has been fully recognised," Mr ElBaradei added.
He said the IAEA's aim was "to make sure we have a world free from nuclear weapons ... where terrorists do not get access to nuclear weapons".
The IAEA director also voiced the hope that the award would help the international community develop a functional system of global security based not on nuclear deterrent but on addressing the security concerns of all people.
The citation said the IAEA's director was a "fearless advocate" of curbing nuclear arms and the importance of his agency's work "incalculable".
The nuclear watchdog's work to promote safe nuclear energy was also commended.
IAEA inspectors have had to deal with major crises in Iraq, North Korea and Iran in recent years as well as investigating the nuclear black market led by Pakistani scientist AQ Khan.
21ST CENTURY PRIZEWINNERS
2005: Mohamed ElBaradei and the IAEA
2004: Wangari Maathai, Kenyan environmental campaigner
2003: Shirin Ebadi, Iranian human rights lawyer
2002: Jimmy Carter, former US president
2001: Kofi Annan, UN secretary general
2000: Kim Dae-jung, former South Korean president
The BBC News website's Paul Reynolds notes that Mr ElBaradei, 63, makes his impact with expert analysis while remaining a fair judge.
But critics accuse the IAEA of failing to prove conclusively whether or not Iran's nuclear ambitions are peaceful, among other things.
And opponents of nuclear civilian energy condemn the agency's parallel commitment to civilian atomic power.
In the words of Greenpeace International, Mr ElBaradei is both "nuclear policeman and nuclear salesman".
Hidankyo, a Japanese association representing survivors of the 1945 atomic bomb attacks, said the decision in Oslo was "very disappointing" as the IAEA did not conduct "peace activities".