Iranian dissident director Jafar Panahi won the Golden Bear top prize at the 65th Berlin film festival Saturday for "Taxi", his third movie made in defiance of an official ban.
Panahi, who is outlawed from travelling abroad and was absent from the festival, appears on-screen in the film as a Tehran cab driver, swapping stories with the denizens of his city.
A mounted dashboard camera allowed him to film in secret, away -- at first -- from the prying eyes of the Islamic state's authorities.
"Limitations often inspire storytellers to make better work but sometimes those limitations can be so suffocating they destroy a project or damage the soul of the artist," the jury president, Hollywood director Darren Aronofsky, said.
"Instead of allowing his spirit to be crushed and giving up, instead of allowing himself to be filled with anger and frustration, Jafar Panahi created a love letter to cinema. His film is filled with love for his art, his community, his country and his audience."
Panahi was represented on stage in the German capital by his young niece, who appears in the film, and she wept openly as she accepted the statuette.
"I'm not able to say anything, I'm too moved," she said.
The Silver Bear prizes for acting went to the cast of British drama "45 Years", Charlotte Rampling and Tom Courtenay.
Rampling said her father had won a gold medal at the 1936 Olympic Games and that she had long dreamed of taking "the baton from him".
"Well, I think this Bear has done the trick," she said with a smile.
The slow-burn drama by Andrew Haigh shows a couple on the eve of their 45th wedding anniversary whose marriage begins to founder when the husband learns the body of his long-dead first love has resurfaced.
- 'Terrific road movie' -
Chilean drama "The Club" by Pablo Larrain about defrocked paedophile priests given refuge from justice by the Roman Catholic Church claimed the runner-up jury prize.
Two filmmakers shared the Silver Bear prize for best director, Romania's Radu Jude and Malgorzata Szumowska of Poland.
Jude's "Aferim!" is a Balkan Western about a 19th century constable and his son dispatched to track down a runaway gypsy slave. The film explores the roots of contemporary prejudice against Roma.
Jude called on Romania's cultural authorities to "support quality filmmaking more" with increased funding.
Szumowska's "Body" tells the story of a Warsaw widower and his anorexic daughter who seek the help of a therapist who believes she can communicate with the dead.
"I am director but I'm also a woman -- I think it's a nice combination," said Szumowska, one of three female filmmakers in competition at this year's event.
Film industry bible Variety called Panahi's "Taxi" a "terrific road movie" that offered "a provocative discussion of Iranian social mores and the art of cinematic storytelling".
Prizes at the Berlin film festival, the first major cinema showcase in Europe of the year, can help propel a picture to global box office success and further honours.
Among award winners last year were "The Grand Budapest Hotel" and "Boyhood", both nominated for Oscars later this month, and the gritty Chinese thriller that won the Golden Bear, "Black Coal, Thin Ice".