CANNES, France (AFP) - The top prize win also spotlights Romania's fledgling cinema as the rising star in European film.
Cristian Mungiu's devastating "4 Months, 3 Weeks and 2 Days", about two women sharing the drama of a back-alley abortion and the daily despair of life under communism, won Cannes' coveted Palme d'Or.
A day earlier a first feature by another Romanian took top prize in a prestige sidebar competition at Cannes.
"I hope this Palme d'Or will be good news to small film-makers from small countries," said quietly-spoken Mungiu as he picked up the golden trophy.
"It seems, finally, that you don't need big budgets and big stars to make a story everyone will listen to," he added.
And the 39-year-old director, screen-writer and producer took a swipe at Hollywood after walking off with the Cannes award.
"This is much more important for us than the Oscars," he said. "It means you are a real film-maker."
Only the second feature by the teacher-then-journalist-turned-moviemaker, Mungiu dubbed the prize "the best thing that has happened to a new wave of Romanian cinema, which has already known success."
With only 10 to 15 films produced annually, accounting for a bare four percent of tickets sold at home, Romania's new generation of film-makers, trained at the country's sole film school, are relative newcomers to the European movie scene.
But filmfests have been paying increasing attention in recent years to the eastern European country's young directors.
Many, like Mungiu, are part of the "post-December" school of film, referring to the demise of Nicolae Ceausescu's regime in December 1989.
Almost two decades later, Romanian movies are still recovering "from 30 years of communism, a bleak period for its cinema, then used only as a propaganda tool," producer Andrei Bronca said in the French screen magazine Le Film Francais.
Mungiu's low-budget movie was produced for less than 600,000 euros (808,000 dollars), and only six months ago funds were short.
"We work fast ... and do everything at once," said Mungiu, who shoots outdoors and favours long takes, giving his films a fluid natural touch.
Industry bible Variety called his latest film "pitch perfect and brilliantly acted" and commended the director for the "purity and honesty" of his picture.
Romanian television flashed news of the prize across the nation.
"This is extraordinary," said renowned Romanian critic Irina Nistor, while colleague Antoaneta Banu spoke of a "new page in the history of Romanian cinema."
"This is the most important prize and it's extraordinary that it was given to a Romanian film," said Corneliu Porumboiu, a film-maker of Mungiu's generation.
The film has already picked up two prizes at Cannes -- the International Critics' award and France's education ministry award.
On Saturday, the festival's sidebar section "Un Certain Regard", focusing on new upcoming directorial talent, handed its top prize to another Romanian feature -- "California dreamin'" by Cristian Nemescu, who died in a car accident last year aged 27, before completing the film.
"It is by far the liveliest and most free film idea we have seen here," said French film-maker Pascale Ferran, on handing out the award.
Only two years ago another Romanian movie, "The Death of Mr Lazarescu" by Cristi Puiu, dubbed one of the year's 10 best films by the New York Times, also won the main prize in the sidebar Un Certain Regard competition.
And last year a first feature by Corneliu Porumboiu, "12:08 East of Bucharest" won the festival's Camera d'Or for best first film.
"There has been lots of interest in our films, which range from fiction to animation, mostly from Europeans," Andreea Tanase of the Romanian National Film Centre told AFP.
"Romania now has several co-production projects in the pipeline, partly thanks to the hugely positive response to its well-crafted films that include '4 Months, 3 Weeks and 2 Days'," Tanase added.
Mungiu said he hoped the Palme d'Or "is not the last day of my career.
"I hope I will make more films."