The victory is Peugeot's first at Le Mans since 1993
Peugeot finished first and second in the Le Mans 24-hour race to end Audi's five-year domination of the event.
Spain's Marc Gene, Australia's David Brabham and Alexander Wurz of Austria drove their diesel-powered Peugeot number nine car to victory.
The trio completed 382 laps, one lap more than the Peugeot number eight car driven by Frenchmen Sebastien Bourdais, Franck Montagny and Stephane Sarrazin.
Audi's Allan McNish, Rinaldo Capello and Tom Kristensen were third.
The trio, who won the race last year, were well in contention until they had to pit twice in the space of a few minutes during the 21st hour of the race.
Britain's McNish went in first to change the steering wheel and then Capello came back in with an engine problem and they eventually finished six laps back.
"Audi will bounce back, of that there is no question," said McNish.
"We have enjoyed phenomenal success here at Le Mans and will come back again stronger."
Peugeot's all-French number eight team started on pole and Montagny, Sarrazin and Bourdais stayed in front for most of the first six hours until their car suffered a transmission problem and the team lost nine minutes changing the left rear axle.
That allowed Gene, Brabham and Wurz through and they enjoyed a trouble-free run as Wurz, who won in a Porsche in 1996, secured a second race win.
It was a fitting way for British-born Brabham, the son of three-time Formula One champion Sir Jack Brabham, to commemorate the 50th anniversary of his father's first F1 title in 1959.
"It's a magical feeling to finally win Le Mans, we had a perfect race, no problems whatsoever," he said.
"I'm overjoyed to win the world's biggest race,"
However, Peugeot did lose a private-run car when Benoit Treluyer spectacularly crashed out overnight. His car was destroyed and the French driver was taken to the medical centre but his team said he was fine.
The second Audi also crashed out when German driver Lucas Luhr lost control at the Porsche curve and smashed into the trackside barriers.
Underdogs Aston Martin, celebrating the 50th anniversary of their first Le Mans victory, were fourth - nine laps off the pace.
1. D Brabham (Aus), M Gene (Spa), A Wurz (Aut), Peugeot, 382 laps
2. S Bourdais, F Montagny & S Sarrazin (Fra), Peugeot, 381
3. R Capello (Ita), T Kristensen (Den), A McNish (GB), Audi, 376
4. J Charouz & T Enge (Cze), S Mucke (Ger), Lola Aston Martin, 373
5. O Panis, N Lapierre and S Ayari (Fra) Oreca, 370
6. C Klien (Aut), P Lamy (Por), N Minassian (Fra), Peugeot, 369
7. N Karthikeyan (Ind), A Lotterer (Jpn), C Zwolsman (Ned), Kolles, 369
8. C Tinseau & B Jouanny (Fra), J Barbosa (Por), Pescarolo, 368
9. C Albers (Ned), C Bakkerud (Den), G Mondini (Ita), Kolles, 360
10. C Elgaard & K Poulsen (Den), E Collard (Fra), Porsche RS Spyder, 357