French actor Lambert Wilson hosted the black-tie event in the festival's 2,300-seat main theatre.
US directing duo the Coen brothers headed this year's jury of top actors and filmmakers deciding which of the 19 competition entries will walk away with the 20,000-euro (USD 24,000) gold-and-crystal trophy.
Two runner-up films will also get prizes, along with awards for best director, actor, actress and screenplay.
Critics have hailed this year's crop, which revealed a remarkably strong contingent from Italy, two noted Chinese-language pictures, a couple of American features seemingly destined for Oscar acclaim, a raw Holocaust movie, and a mixed bag of French fare.
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But which way the jury will jump is anyone's guess.
Joel and Ethan Coen, the makers of Oscar-winner "No Country for Old Men" and the 1991 Palme d'Or winner "Barton Fink", could be swayed by movies with menace, or oddball humour, or extraordinary production values.
The opinions of the other members of the panel also have to be taken into account -- for instance, Mexican director Guillermo del Toro (known for fantasies such as "Pan's Labyrinth), Canadian wunderkind filmmaker Xavier Dolan, and actors Jake Gyllenhaal and Sienna Miller.
"It is a historic moment -- the first time a story of love between two women has been treated with the respect and importance that we accord to all other cinematic romances," said Queer Palm jury president Desiree Akhavan, an American actress and director.
Many critics believe the film is likely to earn Australian actress Cate Blanchett accolades for her memorable performance.