Israeli director Nadav Lapid won the Golden Bear top prize at the Berlin film festival Saturday for "Synonyms" about an expatriate in Paris wrestling with his identity.
Lapid said the sexually explicit, semi-autobiographical movie, which deals with a young man who has fled Israel over its fraught political situation, might cause a "scandal" in his home country.
"But for me the film is also a big celebration... of cinema," he said.
The runner-up jury prize went to French filmmaker Francois Ozon for "By the Grace of God", a wrenching drama based on real-life survivors of rampant sexual molestation in the Catholic church.
"The film tries to break the silence in powerful institutions," he said.
"I want to share this prize with the victims of sexual abuse."
The stars of moving Chinese epic "So Long, My Son", Wang Jingchun and Yong Mei, about the lasting impact of the country's now abandoned one-child policy, shared the Silver Bear top acting prizes.
"This is the tragedy of a woman, a family that loses its son," Yong said as she picked up her trophy.
"We were happy we were able to complete the film."
'Make sense of history'
Jury president Juliette Binoche had earlier expressed "regret" that another Chinese film, veteran Zhang Yimou's "One Second", was pulled from the competition during the festival reportedly due to official censorship.
"Zhang has been an essential voice in international cinema," she said.
"We need artists who help us make sense of history."
German filmmaker Angela Schanelec won the best director prize for "I Was At Home, But", a drama about a teenager who returns after a week-long disappearance to his mother, a grieving widow.
Schanelec, 57, was one of a record seven women among the 16 contenders in the competition at the Berlinale, Europe's first cinema showcase of the year.
"Piranhas" by Italian director Claudio Giovannesi about the youth of Naples being indoctrinated at ever earlier ages into the mafia won best screenplay.
Roberto Saviano, who co-wrote the script based on his book "La Paranza dei Bambini", dedicated the trophy to NGOs working to save the lives of refugees in the Mediterranean.
"The goal of the movie was to resist," he said.
"Telling the truth has become very complex in our country so thank you."
The awards ceremony began with a tribute and standing ovation for Swiss actor Bruno Ganz, who starred in iconic German films such as "Downfall" in which he played Adolf Hitler and Wim Wenders's "Wings of Desire" set in divided Berlin.
'Wilfully confrontational satire'
"Synonyms" is the third feature by Lapid, whose previous film "The Kindergarten Teacher" has been remade in the US starring Maggie Gyllenhaal.
The film, which delves into the deep ambivalence of the young Yoav about both his birth country Israel and adopted homeland of France, divided critics.
The picture is centred around "newcomer Tom Mercier, who delivers a raw, disconcerting and altogether unpredictable turn that recalls the work of a young Tom Hardy (this includes his ability to act without any clothes on)," the Hollywood Reporter wrote.
Yoav won't allow himself to speak Hebrew so he communicates in a kind of pidgin French he's cobbled together from a dictionary.
He tells largely disinterested Parisians that has left Israel to get away from a country that he finds "repugnant, fetid, obscene, vulgar" -- words that help give the film its title.
Yoav gets caught in a love triangle with a posh Left Bank couple, who lend him the mustard-coloured overcoat he wears throughout the movie.
But when he runs into financial trouble, he advertises his services as a nude model. An artist who answers the post films him on an iPad performing sexual acts on himself while shouting in Hebrew.
His periodic run-ins with Israeli security officers from the embassy prove similarly absurd.
US website Indie wire called the movie a "wilfully confrontational satire that pugnaciously mocks his own Israeli identity; the culture of France, where Lapid lived at the start of this century; and assorted conventions and decorums of art cinema".
Last year, Romania's Adina Pintilie won the Golden Bear for her innovative sex docudrama, "Touch Me Not".