The 2011 Chevrolet Volt beat back competition from Asian rivals including Nissan and Hyundai to win the Green Car of the Year award at the Los Angeles auto show on Thursday.
The General Motors-built car pipped the prize from a top five which also included the Ford Fiesta, the Hyundai Sonata Hybrid, the Lincoln MKZ Hybrid, and the Nissan LEAF.
The award to the US carmaker will provide a morale-boosting shot in the arm for the ailing US car industry, still struggling to recover from the near-meltdown amid the 2008 global financial crisis.
"I'm very humbled to stand up here with this car," said GM vice-president Joel Ewanick, receiving the Green Car Journal-judged prize at the LA car show, which opens to the public on Friday.
Paying tribute to his engineers, he added: "They wanted to make a great car, but they also felt that they were doing something for the environment, for the world, to give us energy security going forward."
The Volt can drive for up to 40 miles (65 km) on one charge, but also has a gasoline engine to recharge the battery, extending its range from just commuter driving.
The judging panel which chose the car included US talk show host and auto enthusiast Jay Leno.
US President Barack Obama drove a Volt in July when he toured the Detroit region to tout his economic policies and the revitalized auto industry.
His visit came little over a year after GM and Chrysler emerged from a bankruptcy process designed by Washington, and which supporters say has made the firms leaner and meaner.