The verdict brings a long-awaited day of reckoning to up to 40,000 people kidnapped, raped and tortured under his rule as president of Chad from 1982-1990.
"Hissene Habre, this court finds you guilty of crimes against humanity, rape, forced slavery, and kidnapping," as well as war crimes, said Gberdao Gustave Kam, president of the special court.
"The court condemns you to life in prison," Kam added.
The court also heard that Habre had raped a woman named Khadija Hassan Zidane on several occasions.
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The case was heard at the Extraordinary African Chambers (CAE) -- a special tribunal set up by the African Union under a deal with Senegal - and is the first time a country has prosecuted a former leader of another nation for rights abuses.
Reed Brody, a lawyer for Human Rights Watch who has spent the last 15 years working with victims to bring Habre to justice, said the conviction was a warning to other despots.
Known as a skilled desert warrior who often wore combat fatigues to fit the role, Habre fled to Senegal after his 1990 ouster by Chad's current President Idriss Deby.
Witnesses recounted the horror of life in Chad's prisons, describing in graphic detail abusive and often deadly punishments inflicted by Habre's feared secret police, the Documentation and Security Directorate (DDS).
Victims were subject to electric shocks and waterboarding while some had gas sprayed in their eyes or spice rubbed into their genitals, the court heard.