Iranian director Asghar Farhadi's film Nader And Simin, A Separation swept the board at the Berlin film festival.
A six-member jury led by actress Isabella Rossellini handed the movie the top Golden Bear prize and its ensemble cast, led by Peyman Moadi and Leila Hatami, both the best actor and the best actress awards.
"I never would have thought that I would win this prize," Farhadi said as he collected the Golden Bear.
He added that it offers "a very good opportunity to think of the people of my country - the country I grew up in, the country where I learned my stories - a great people."
The film highlights a clash between traditional and modern ways of living and thinking, as well as class differences.
Iran has been in the spotlight at the Berlin festival because the jury's official seventh member, Iranian director Jafar Panahi, was unable to come after being sentenced to six years in jail on charges of working against the ruling system.
"I would like to recall Jafar Panahi - I really think his problem will be solved, and I would like him to stand here next year," said Farhadi, speaking through an interpreter.
Farhadi was honoured as best director in Berlin two years ago for his previous movie, About Elly.
This year's best director honour went to Germany's Ulrich Koehler for Sleeping Sickness, a film about an aid worker long based in Africa and his increasingly alienated wife.
Hungarian director Bela Tarr's starkly minimalist, black-and-white The Turin Horse, the story of a farmer and his horse, won a runner-up Silver Bear.