Jennifer Hawkins, a 5-foot-11 blonde with blue eyes, was chosen from among 80 beauty queens.
Miss USA Shandi Finnessey of Florissant, Mo., was named first runnerup during the pageant at a convention center on the northern outskirts of Quito, drawing 7,500 spectators.
Hawkins and Finnessey hugged before the winner was announced. Hawkins then received the crown from outgoing Miss Universe Amelia Vega, of the Dominican Republic, and strolled down the runway to the cheers of the crowd.
Besides her modeling and dancing pursuits, pageant officials said she also choreographs a dance team that tours Australia. Her interests include surfing, camping and watching ballet.
The three other finalists were Miss Puerto Rico Alba Reyes, Miss Paraguay Yanina Gonzalez and Miss Trinidad & Tobago Danielle Jones.
The finalists were announced after 10 semifinalists paraded in swimsuits.
Before the pageant began, singer Gloria Estefan defended the contest from critics who consider such events frivolous.
"A beautiful woman has very great powers to convince, and we have seen many misses who have done a great job," said the Cuban-American singer, who performed at the Miss Universe finals Tuesday night. "The new Miss Universe should do a spectacular job helping the needy."
The panel of judges included Emilio Estefan, actress Bo Derek and supermodel Petra Nemcova.
Kwame Jackson, who was runner-up on the U.S. reality show "The Apprentice," was dropped as a judge at the beauty event. Jackson was disqualified Monday by pageant organizers for greeting beauty queens he bumped into in the lobby of their hotel.
"Just being here makes me feel like a winner and if I get to be one of the finalists, it will be great and I will feel like one of the proudest women in the world," Miss Spain Maria Jesus Ruiz said Monday.
But she did not make the cut.
Ecuadoreans were hoping the two-hour show would showcase the beauty of their country and attract tourists to this small Andean nation.
Ten minutes of the program spotlighted the country's attractions - ranging from the unique flora and fauna of the Galapagos Islands to snowcapped volcanoes, highland Indian communities and the lush vegetation of its Amazon jungle.
"Ecuador is going to shine for what it is, an unforgettable place, when you see the videos we have made for the show," said Daisy Fuentes, who hosted the program along with Billy Bush.