The UN cultural organisation has voted strongly in favour of membership for the Palestinians - a move opposed by Israel and the United States.
Of 173 countries voting, 107 were in favour, 14 opposed and 52 abstained.
Under US law, Washington can now withdraw funding to Unesco. This would deprive the agency of some $70m (£43.7m) - more than 20% of its budget.
The UN Security Council will vote next month on whether to grant the Palestinians full UN membership.
Membership of Unesco - perhaps best known for its World Heritage Sites - may seem a strange step towards statehood, says the BBC's Jon Donnison, in Ramallah, but Palestinian leaders see it as part of a broader push to get international recognition and put pressure on Israel.
This is the first UN agency the Palestinians have sought to join since submitting their bid for recognition to the Security Council in September.
Unesco membership may seem a strange and short step to Palestinian statehood. But leaders here see it as part of a broader push to get international recognition and pressure Israel. They see it as a warm-up for a more important vote next month when the UN Security Council will decide whether to admit Palestine as a full member state.
The US has veto power at the security council and has threatened to use it. It had no such power at Unesco so instead lobbied hard to try and force the Palestinians to back down. It will likely cut all US funding for Unesco - $70m a year, or 22% of its annual budget.
But Unesco members seemed to put politics before money, clearly voting in favour of the Palestinian bid. This was a failure of US power, one Palestinian official told me.
The victory will give a boost to the Palestinian President Mahmoud Abbas. He lost ground to his rival Hamas when the Islamist movement secured the release of hundreds of Palestinan prisoners in exchange for captured Israeli solider Gilad Shalit two weeks ago.
"This vote will erase a tiny part of the injustice done to the Palestinian people," Palestinian Foreign Minister Riyad al-Malki told the Unesco meeting in Paris, after the result was announced.
Widespread applause greeted the result of Monday's vote in the chamber, where a two-thirds majority is enough to pass the decision and no country has the right of veto.
The BBC's David Chazan in Paris says Arab states were instrumental in getting the vote passed despite intense opposition from the US.
He says that in an emotional session, China, Russia, India, Brazil and South Africa voted in favour of Palestinian membership, while the US, Canada and Germany voted against and the UK abstained.
'No shortcuts'The outcome was swiftly denounced by the US and Israel.
White House spokesman Jay Carney said the Unesco vote was "premature and undermines the international community's shared goal of a comprehensive, just and lasting peace in the Middle East".
Earlier, US ambassador to Unesco David Killion said the "counterproductive" move "will complicate our ability to support Unesco's programmes."
"The only path to the Palestinian state that we all seek is through direct negotiations. There are no shortcuts," he told journalists.
A US law passed in the 1990s allows Washington to cut funding to any UN body that admits Palestine as a full member.
Palestinian UN Statehood Bid
- Palestinians currently have permanent observer entity status at the UN
- They are represented by the Palestine Liberation Organisation (PLO)
- Officials now want an upgrade so a state of Palestine has full member status at the UN
- They seek recognition on 1967 borders - in the West Bank, including East Jerusalem, and Gaza
- Enhanced observer member status could be an interim option
The US currently funds more than 20% of Unesco's entire budget. The proposed budget to be agreed by the conference for 2012 and 2013 is $653m, up $10m on the previous two-year figure.
An Israeli foreign ministry statement called the vote a "unilateral Palestinian manoeuvre which will bring no change on the ground but further removes the possibility for a peace agreement".
"The Palestinian move at Unesco, as with similar such steps with other UN bodies, is tantamount to a rejection of the international community's efforts to advance the peace process," it said.
The statement added that Israel would be considering further steps regarding its co-operation with Unesco.
Correspondents say Monday's vote is a symbolic breakthrough but that on its own it will not create a Palestinian state.
A vote is expected in November at the UN Security Council on granting full membership of the UN to the Palestinians. The US has said it will exercise its veto.