YouTube said in a posting on its Trends blog that Gangnam Style had been viewed 805 million times, surpassing Justin Bieber's Baby, which has had 803 million views.
The blog says the "velocity of popularity for PSY's outlandish video is unprecedented".
PSY's video featuring his horse-riding dance was posted on YouTube in July, while Baby was uploaded in February 2010.
PSY's video has become a global sensation, with many people around the world mimicking his Gangnam Style dance.
In their October meeting, United Nations secretary general Ban Ki-moon, a South Korean, joked that he had to relinquish his title as "the most famous Korean" and tried a few of PSY's dance moves.
Psy, real name Park Jae Sang, is the latest export from South Korea's K-Pop (or Korean Pop) culture, whose usual exponents come in the form of auto-tuned, implausibly attractive girl and boy bands.
Their videos regularly go viral among millions of teenagers at home and abroad, but Psy – a portly, thirtysomething rapper with a penchant for bow ties – has eclipsed them all, to the surprise and delight of K-pop's ex-pat fans.
Gangnam – a wealthy district of the South Korean capital, Seoul – is home to the rich and privileged children of corporate millionaires.
So while fans love the kitsch video and Psy's "riding an invisible horse" dance, the song could, in fact, be a send-up of the rampant materialism of the Korean upper classes.
Spin-off version starring Hyun-A from K-Pop group 4Minute
Michael Simmons has mashed up Carly Rae Jepsen’s 'Call Me Maybe' with 'Gangnam Style'.
This isn't a good time to make travel plans. Weather conditions and work responsibilities have a way of wreaking havoc with your schedule. Wait another few days before putting down a hefty deposit. Working behind the scenes will yield significant rewards. If someone asks you to serve as their assistant, go ahead and accept. The pay will be excellent and there will be a lot of fringe benefits, too. Don't talk about a neighbour's private life in mixed company.More