The drama, which explores issues of abortion and repression in 1980s communist Romania, beat competition from Quentin Tarantino's Death Proof, Gus Van Sant's Paranoid Park, Wong Kar Wai's My Blueberry Nights, and the Coen Brothers' No Country for Old Men to win the prestigious award.
Accepting the prize, director Cristian Mungiu said, "This story, in which we believe so much, is going to reach lots of people now.
"I also hope that this award that I am getting tonight is going to be good news for small filmmakers from small countries because it looks like you don't necessarily need a big budget and a lot of stars."
The jury, headed by British director Stephen Frears, awarded two jury prizes to Persepolis, a film about a young woman growing up during the Iranian revolution, and Silent Light, which explores a husband's infidelity in a Mennonite community based in Mexico.
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