Movie hits such as The King's Speech and The Inbetweeners have helped UK box office takings to exceed £1 billion for the first time.
New figures from the British Film Institute show cinema receipts have risen by 61 per cent in the past decade.
The BFI's annual statistical yearbook shows that spending on film production in the UK has also reached a new high, topping £1.27 billion in 2011.
The total at the box office last year was £1.04 billion, 5 per cent up on the previous year. But it marked a massive increase on the £645 million spent on cinema-going in 2001.
The top three highest grossing films at UK cinemas were all home grown, with the final instalment of the Harry Potter series - Harry Potter and the Deathly Hallows: Part 2 - topping the list by taking £73 million and more than £1.3 billion worldwide.
Oscar-winner The King's Speech was second while The Inbetweeners Movie took third place.
Movie production within the UK has taken a hefty tumble with 274 feature films made in 2011, down from 343 the previous years, although total spending was up £20 million.
The latest BFI figures show the UK film industry had a turnover of £7.2 billion in 2010 - two-and-a-half times the value of the industry back in 1995 in real terms. It had a direct contribution to the domestic economy of £3.3 billion, the report says.
New analysis of one of the biggest UK successes of recent years, the Harry Potter franchise, shows it has taken a total of £442 million at the UK box office.
BFI chief executive Amanda Nevill said: "UK film is punching above its weight on the world stage, with British stories and talent captivating global audiences, the British public embracing film-watching in increasing numbers, and British independent films enjoying unprecedented levels of success."
But she added: "We are far from complacent - it's still a tough economic climate in which to raise finance for film production, and digital technologies continue to bring both challenges and opportunities for industry.
"We are committed to increasing Lottery funding for UK film in the round over the next five years, and we are working closely and collaboratively with our partners and stakeholders to deliver robust support for UK film right across the value chain, to ensure we maintain momentum and UK film continues to go from strength to strength."
Creative Industries Minister Ed Vaizey said: "This dynamic industry continues to create jobs and attract significant overseas investment and the Government is committed to ensuring this sector continues to flourish and thrive."