The man considered to be the head of the Sicilian Mafia, Bernardo Provenzano, has been arrested after more than four decades on the run.
Provenzano had been on the run for more than half his life
Italian police said 73-year-old Provenzano, deemed the country's most wanted man, was arrested near his home town of Corleone in Sicily.
He was sentenced in his absence to life in prison for a string of murders.
Police believe he took over command of the Mafia after the 1993 arrest of ex-boss Salvatore "Toto" Riina.
Provenzano's capture is an important victory for law and order in Sicily, where the police still fight Mafia crime on a daily basis, says the BBC's David Willey in Rome.
1933: Born in the Sicilian Mafia stronghold of Corleone
1963: Goes on the run after arrest warrant is issued against him
1993: Thought to have taken over as head of the Mafia
Crimes he has been convicted of include the killings in 1992 of top anti-Mafia judges Giovanni Falcone and Paolo Borsellino.
Italian President Carlo Azeglio Ciampi expressed his delight over the arrest to Interior Minister Giuseppe Pisanu, a statement from the presidential palace said.
"His capture is an exceptionally important success because it makes it possible to hand over to justice the present head of Cosa Nostra [the Sicilian Mafia] and put an end to a flight that has lasted too long," Sicilian judges said in a joint statement.
Provenzano, nicknamed U Tratturi (The Tractor), has been on the run for more than half his life. Police say he was arrested at a farmhouse near Corleone, where he was born and where his wife and children live.
Corleone was made famous in the Hollywood film about the Mafia, The Godfather, and gave its name to the fictional family in the trilogy.
Mafia informers said Provenzano moved between farmhouses in the region every two or three nights to evade capture.
Italy's anti-mafia prosecutor Piero Grasso said police tracked him down by following a package of clean laundry delivered to his hideout.
Detectives found tracing him difficult, as the last photo they had was nearly 50 years old.
But they had a breakthrough when they discovered he had received treatment for prostate problems under an assumed name at a clinic in southern France.
Mr Grasso, who has recently led the hunt for the fugitive, said Provenzano had a network of businessmen, technical experts, and politicians whom he could call on for help.
Police said Provenzano was wearing a blue jacket and jeans and put up no resistance when he was arrested.
He was also silent during his capture, speaking only to confirm his identity, authorities said.
Onlookers shouted "Assassin" and "Bastard" when he was later brought to police headquarters in the Sicilian capital, Palermo.
Provenzano's disguises and daring are legendary, our correspondent says.
He devised a personal protection system to escape arrest and never communicated with his friends except by written notes carried by trusted lieutenants, our correspondent says.
Many times, police announced they were on the point of tracking him down, but he always appeared to escape at the last moment.