Osteria Francescana, which came in second at last year's awards, is located in the small city of Modena in northern Italy's Emilia Romagna region.
It's helmed by chef Massimo Bottura, a man credited with reinventing classic Italian cuisine by offering dishes that combine tradition and irreverence and touch all the senses.
While accepting his award at the ceremony, held June 13 in New York, a thrilled Bottura held up an Italian flag, saying he felt he might cry he was so emotional.
"I want to thank everyone," he said.
"Our job is all about hard work. People think we are rock stars, we are going here or there. It's all about our work -- in the kitchen, every day, to work and succeed."
Top 10 comings and goings
Many of the usual culinary suspects rounded out this year's top 10.
At ninth, Steirereck of Vienna celebrated its first appearance in the top 10, along with Biscay, Asador Etxebarri's restaurant in Spain. Last year's highest climber, in 2016 the Spanish barbeque eatery moved from 13th up to number 10.
Last year's number seven, it plummeted to 45th place.
Another noticeable absence from the top 10 was Asia's best restaurant, Gaggan.
The Bangkok-based Indian restaurant slipped from 10th to 23rd this year.
Maybe less surprising -- with the list often criticized for its male dominance -- was the absence of female-run restaurants.
France's Pierre Herme was named best pastry chef.
The "Chef's Choice Award," voted on by other chefs on the 50 best list, was awarded to Joan Roca of El Celler de Can Roca.
This year's lifetime achievement award went to chef Alain Passard of Michelin three-star restaurant L'Arpege in Paris.
According to organizers, the results were compiled from an "independent" voting panel of 1,000 judges that were subject to adjudication.
This year's awards ceremony, widely viewed as the Oscars of fine dining, took place in New York -- moving away from London for the first time as part of efforts to make the event "truly global."
During the awards, it was announced that the 2017 World's 50 Best ceremony will take place in Melbourne, Australia.