SpaceShipOne designer Burt Rutan accepted the Ansari X Prize money along with a 150-pound trophy as a chase plane flew over the ceremony in a field adjacent to the St. Louis Science Center.
The rocket plane, financed with more than $20 million from Microsoft billionaire Paul Allen, qualified for the prize by blasting into space twice in five days last month.
"Eight years ago, we stood here and said one day someone is going to do something no one's ever done before," said Doug King, president of the Science Center.
The X Prize, offered to the first team to get into space twice in a 14-day span, will now evolve into a regular competition called the X Prize Cup.
More than two-dozen teams worldwide began projects in hopes of winning the original X Prize, and prize founder Peter Diamandis said the purpose of the Cup competition is to keep such groups going with a "grand prix of space."
The prize got its start in St. Louis 1996, when Diamandis read Charles Lindbergh's "The Spirit of St. Louis" and realized how aviation contests, like the $25,000 Orteig prize awarded to Lindbergh, helped launch mainstream air travel.
Several aviation enthusiasts donated $25,000 apiece to jump-start the X Prize. The Ansari family of Texas then pledged more than $1 million, which helped draw more investors.
SpaceShipOne, which took off from the Mojave Airport north of Los Angeles, completed the first flight Sept. 29 and a second flight Oct. 4.
Richard Branson, the British airline mogul and adventurer, announced that beginning in 2007, he will sell suborbital space rides for about $200,000 per person, using SpaceShipOne's technology.
Branson has said more than 7,000 people have shown interest.
"We've always known that our prize is just a start," said Gregg Maryniak, the X Prize's executive director. "The real prize is the business, opening the frontiers of space for everyone."