Iris Mittenaere, a dental surgery student from Lille in the north of France, beat 85 of the world's most beautiful women at the event in the Philippines scheduled for primetime viewing in the United States.
Mittenaere, 24, edged out Miss Haiti, the first runner-up, and Miss Colombia, the second runner-up, to win France's first Miss Universe title since 1953.
“I was very surprised. I am always touching the crown and saying 'Oh my God. I have the crown on my head. I don't believe it,'” Mittenaere said in a post-pageant news conference.
“French people love beauty pageants but they don't really know Miss Universe because never (did) our country win,” she said, adding she would advocate for good hygiene and educating children.
In the final question round, the six remaining contestants were each asked questions relating to various political issues in their own countries or abroad.
When asked about the global refugee crisis, Mittenaere said France had the right to close its borders to refugees if it wanted but she also spoke about the benefits of migration.
“In France we want to have the most globalisation that we can. We want to have the biggest exchange of people that we can. Maybe someday that will change but now we have open borders,” Mittenaere said, with her comments translated into English for the audience.
“Having open borders allows us to travel more through the world and to find out more about what's out there in the world.”
Miss Kenya, another finalist, said Donald Trump's presidency “may not have been the choice of many people” in the United States.
“So many people oppose his position. But I feel that once (Trump) took up his position, he was able to unify the entire nation,” said Mary Esther Were, 27.
Miss Colombia appeared to allude to Trump when asked why violence was prevalent in the world.
“Although there are presidents who don't get along with others, we work together to unite. Campaigns, respect and inclusivity to be able to have a social transformation that would educate our children,” said Andrea Tovar, 23.
Monday's show was headlined by US performers including Grammy award-winning rhythm and blues group Boyz II Men and rapper and Grammy award nominee Flo Rida.
Pia Wurtzbach of the Philippines won last year following a major blunder in which the host — Emmy Award winner Steve Harvey — mistakenly awarded the title to Miss Colombia.
Harvey corrected the error minutes later, apologising on air to Wurtzbach and Miss Colombia, Ariadna Gutierrez.
The mistake featured prominently on Monday's show, with candidates and the home audience often ribbing Harvey about it.
“Steve, I never got to thank you but thank you for making me the most popular Miss Universe,” Wurtzbach told Harvey at the opening of show.
Harvey this year got through the closing moments of the ceremony smoothly.
The Philippines agreed to host the pageant as part of efforts to draw tourists and investors.
Beauty pageants are also hugely popular in the Philippines, particularly among the tens of millions of poor who see the contests as a chance for their beautiful compatriots to live a life of fame and luxury.
But allowing the Philippines to host has proved controversial, with critics claiming the pageant would whitewash Duterte's brutal drug war, which has left more than 6,000 people dead.
Environmentalists also hit out at pageant organisers for letting the bikini-clad contestants swim last month with endangered whale sharks.