Venezuelan Stefania Fernandez was crowned the new Miss Universe after she was selected from among young women from 83 countries.
The official decision was made at the Atlantis Resort in the Bahamas by a 12-person judging panel that included Andre Leon Talley, the editor-at-large for the US edition of Vogue, actor Dean Cain and supermodel Valeria Mazza.
It was Venezuela's sixth Miss Universe crown in the 59-year history of the pageant.
The main event Sunday was hosted by Celebrity Apprentice star Claudia Jordan and Access Hollywood co-anchor Billy Bush, and included performances by rapper Flo Rida, singers David Guetta and Kelly Rowland and reality star Heidi Montag.
Ms Fernandez, 18, inherited the Miss Universe crown from another Venezuelan, Dayana Mendoza, who won the competition last year. During her reign, Mendoza travelled the globe as an advocate for HIV/AIDS education, research and legislation.
The newly crowned Miss Universe is expected to do the same.
"We Venezuelans never tire. We made history today," Ms Mendoza said in a telephone interview with Venezuelan media after the event. "It was almost impossible, but Stefania did an excellent job."
Two other young women from Latin America made it into the top five: 23-year-old Ada de la Cruz of the Dominican Republic and Mayra Matos, 20, of Puerto Rico.
The top group also included young women from Australia and Kosovo.
Representatives of the Czech Republic, Switzerland, France, South Africa and the United States made it to the top 10.
As the new Miss Universe, Ms Fernandez will receive a monetary prize, the size of which has been kept confidential. The top award also includes a $100,000 scholarship to study acting at an academy in New York, a five-day vacation package in the Bahamas for two, a set of jewellery and a complete wardrobe.
But the main attraction for contestants is an opportunity to break into and establish themselves in the lucrative world of show business, organisers said.
"Women who seek the title of Miss Universe are driven by their desires to open for themselves new opportunities in the world of acting and entertainment," Acirema Alayeto, president of Miss Latin America Organisation said.
Each contestant was judged in three categories: swimsuit, evening gown and interview as they vied for the coveted title. For the past two weeks, the women have been touring the various islands and participating in preliminary legs of the competition including the swimsuit presentation in Grand Bahama, a costume presentation, a fashion showcase featuring local designs and fabrics and a state auction dinner in New Providence.
On Sunday evening, the pageant was viewed by an estimated worldwide television audience of approximately one billion people.