The formal transfer of power from the former Coalition Provisional Authority to the Iraqi interim government took place in a surprise, low-key ceremony in Baghdad's heavily-guarded Green Zone.
Iraq's interim Prime Minister Iyad Allawi and the country's President Ghazi Yawar were present as US administrator Paul Bremer gave the legal documents to an Iraqi judge.
Later, at the Nato summit in Istanbul, US President George W Bush and British Prime Minister Tony Blair hailed the transfer of power and pledged their continued support for the new Iraqi administration.
PRIME MINISTER IYAD ALLAWI
"This is something I have asked the coalition, to expedite the transfer of sovereignty. We are sure that the Iraqi authority now, the government of Iraq, will be handling the situation whether it is security or economy.
"This is a historic day... This transfer of sovereignty to an Iraqi government and the Iraqi people, we have been working hard. This is a big day for us... The security situation of our country now lies in our hands. We are going to announce the new measures today and tomorrow.
"We feel we are capable of controlling the security situation. We have been laying down strategies for protecting our people. The blood that has been spilled in Iraq has been spilled for a very good reason [in the cause of democracy and
freedom]. The Iraqi government is determined to go ahead with elections on January 2 of next year."
FORMER US ADMINISTRATOR PAUL BREMER
"As recognised in UN Security Council Resolution 1546 the Coalition Provision Authority will cease to exist on June 28 at which point the occupation will end and the Iraqi interim government authority will assume and exercise full sovereign authority on behalf of the Iraqi people.
"Anybody who has any doubts about whether Iraq is a better place today than it was 14 months ago should go and see the mass graves at Hillah or visit Halabja where Saddam gassed thousands of people or see any of the torture chambers or rape rooms around this country.
"We agreed that you are ready for sovereignty"
"It's a great pleasure to be here this day to formally hand over sovereignty on behalf of the coalition. As I leave Iraq I am confident in the future. You have said, and we agreed, that you are ready for sovereignty."
IRAQI PRESIDENT GHAZI YAWAR
"This is a historic day, a happy day, a day that all Iraqis have been looking forward to. This is the time when we take the country back into the international community."
US PRESIDENT GEORGE W BUSH
"Fifteen months after the liberation of Iraq and two days ahead of schedule, the world witnessed the arrival of a full sovereign and free Iraq.
"This is a day of great hope for Iraqis and a day that terrorist enemies hoped never to see...Their bombs and attacks have not prevented Iraqi sovereignty and they will not prevent Iraqi democracy.
"Fifteen months ago, Saddam's regime was an enemy of America and the civilised world. Today, it is an ally of both.
"The Iraqi people will not stand alone... [American forces] will stay as long as the stability of Iraq requires."
BRITISH PRIME MINISTER TONY BLAIR
"Today is obviously an important staging-post on the journey of the people of Iraq towards a new future.
"Many American servicemen have died. Many Iraqi civilians have died... They've all given their lives in the cause of trying to provide a different and better future to the people of Iraq.
"The strategy of these terrorists is to try and prevent Iraq becoming a symbol of hope... The battle for Iraq and its future is, in a genuine sense, the frontline in the battle against terrorism and the new security threat we face."