The British Film Institute's Sight and Sound magazine polls a selected panel once a decade and Citizen Kane has been its top pick for the last 50 years.
This time 846 distributors, critics and academics championed Vertigo, about a retired cop with a fear of heights.
Starring James Stewart and Kim Novak, Vertigo beat Citizen Kane by 34 votes.
In the last poll held 10 years ago, Hitchcock's 1958 thriller came five votes behind Welles's 1941 classic.
Its triumph coincides with the launch of the BFI's Genius of Hitchcock season, a major retrospective celebrating the acclaimed "master of suspense".
Vertigo, the film Hitchcock regarded as his most personal, sees the director tackle obsessional love, one of his recurring themes.
It opens with police officer Scotty Ferguson, played by Stewart, retiring after his vertigo inadvertently leads to the death of a colleague.
1. Vertigo (Hitchcock, 1958)
2. Citizen Kane (Welles, 1941)
3. Tokyo Story (Ozu, 1953)
4. La Regle du Jeu (Renoir, 1939)
5. Sunrise: a Song for Two Humans (Murnau, 1927)
6. 2001: A Space Odyssey (Kubrick, 1968)
7. The Searchers (Ford, 1956)
8. Man with a Movie Camera (Dziga Vertov, 1929)
9. The Passion of Joan of Arc (Dreyer, 1927)
10.  8Â½ (Fellini, 1963)
He is then hired by an old friend whose beautiful wife - played by Novak - is behaving strangely.
As the story plays out against a San Francisco skyline, there are several revelations that challenge the audience's preconceptions about characters and events.
The film is famous for a camera trick Hitchcock invented to represent Scotty's vertigo - a simultaneous zoom-in and pull-back of the camera that creates a disorientating depth of field.
The visual, often imitated, has become known as a "dolly zoom" or "trombone shot".
Like Citizen Kane, Vertigo received mixed reviews on release but has grown in stature as the years have passed.
The Sight and Sound list contains few surprises, with all of the films cited more than 40 years old.
Yasujiro Ozu's Tokyo Story, from 1953, is ranked third - bettering its 2002 placement at five - while Jean Renoir's La Regle du Jeu (The Rules of the Game) drops one place, from three to four.
Both new entries in the Top 10 are silent - Dziga Vertov's Man with a Movie Camera at eight, and Carl Theodor Dreyer's The Passion of Joan of Arc at nine.
The newest film in the Top 10 is Stanley Kubrick's 2001: A Space Odyssey, released in 1968, which charts at six.
The top British film in the countdown is The Third Man, which came in at the relatively low placing of number 73.
1. Tokyo Story (Ozu, 1953)
2=  2001: A Space Odyssey (Kubrick, 1968)
2=  Citizen Kane (Welles, 1941)
4. 8 Â½ (Fellini, 1963)
5. Taxi Driver (Scorsese, 1976)
6. Apocalypse Now (Coppola, 1979)
7=  The Godfather (Coppola, 1972)
7=  Vertigo (Hitchcock, 1958)
9. Mirror (Tarkovsky, 1974)
10. Bicycle Thieves (De Sica, 1948)
Source: Sight & Sound
The panel, which voted for 2,045 films overall, was asked to interpret "greatest" how it saw fit.
Its results, said Sight and Sound editor Nick James, "reflects changes in the culture of film criticism".
Vertigo, he continued, was "the ultimate critics' film".
"It is a dream-like film about people who are not sure who they are but who are busy reconstructing themselves and each other to fit a kind of cinema ideal of the ideal soul-mate."
In a separate poll run by the monthly publication involving 358 film directors, Ozu's Tokyo Story was voted the greatest film ever made.
Citizen Kane is ranked at number two jointly with 2001, while Vertigo occupies seventh place.
Martin Scorsese, Quentin Tarantino, Francis Ford Coppola, Woody Allen and Mike Leigh were among the participants in the poll.
The full results are published in Sight and Sound's September issue.
Alfred Hitchcock's Vertigo has replaced Orson Welles's Citizen Kane at the top of a poll that sets out to name one film "the greatest of all time".