In the 70th Cannes festival, the nine-member jury awarded the trophy to the movie's director, Ruben Ostlund.
"The Square", a Swedish movie about the curator of a museum filled with grotesquely pretentious conceptual art, beat stiff competition to win the top prize at the Cannes Film Festival on Sunday.
Critics hailed the movie by writer-director Ruben Ostlund as "high-wire cinema" that veers between comedy and thriller with moments of pure surrealism.
The film's highlight is a dinner for the museum's well-to-do patrons, with a performance artist leaping from table to table impersonating an ape in a bizarre, tense and ultimately violent scene.
"BPM (Beats Per Minute)", a French movie about AIDS awareness campaigners in the 1980s, was favourite for the award but had to settle for second place, taking the Grand Prize of the Jury.
Sofia Coppola won best director for "The Beguiled", a remake of the 1971 Clint Eastwood tale of sexual tension between an injured soldier in the American Civil War and the women and girls who take him in.
Nicole Kidman, who starred alongside Colin Farrell in that and "The Killing of a Sacred Deer" missed out on the best actress trophy but was awarded a special prize by the Cannes jury, headed by Spanish filmmaker Pedro Almodovar.
Diane Kruger won best actress for her first German-speaking part in "In the Fade", as a woman trying to put her life back together and get justice after her husband and young son are killed in a bomb attack.
Joaquin Phoenix was named best actor for his portrayal of a psychologically damaged hitman in "You Were Never Really Here" by British director Scottish director Lynne Ramsay, who shared the prize for best screenplay with the writers of "The Killing of a Sacred Deer", Yorgos Lanthimos and Efthimis Filippou.
Cannes' 12 days of screenings and celebrity-packed soirees — which were somewhat muted by the Manchester bombing — were marked by unprecedented anti-terror measures and a raging row over how technology is shaping the future of the movie industry.
Netflix had two movies in competition for the first time but faced blowback from critics who argue that online streaming is destroying cinema distribution and with it the magic of the big-screen experience.