Saddam Hussein was found hiding in a ventilated bolt hole 2m by 3m under a mud hut in rural farm compound near his hometown of Tikrit.
Not a single shot was fired by soldiers who swooped on two farmhouses in "Operation Red Dawn", ending one of the most intensive manhunts in history.
Six hundred soldiers mounted the raids after receiving new intelligence, apparently supplied by Kurdish intelligence agencies, that Saddam was alive, well and hiding out in the farm village of Ad Dwar, inside Iraq.
Special Operation soldiers, who had been scouring Iraq for the deposed leader, found Saddam, dusty and disguised with a grey-flecked beard, at the bottom of the hole which had been covered with twigs, bricks and dirt.
The bolt hole, 2m by 3m and large enough for a person to lie down in, had an air vent and an exhaust fan to allow Saddam to remain for days without being detected. US forces were unable to say how long he had been there.
"The American soldiers had to use shovels to dig him out," Entifadh Qanbar, spokesman for Governing Council member Ahmad Chalabi, told the Associated Press.
Soldiers in "Operation Red Dawn" were not at first certain they had caught Saddam.
The capturing team studied scars on his body and concluded they matched the wounds the US believes Saddam would have suffered in past coup attempts.
Soldiers photographed him, shaved off his beard and ran DNA tests to confirm it was Saddam.
After his capture he was taken to Baghdad's airport where he was shown to other former Iraqi leaders already in custody at the airport to confirm his identity.
The Special Ops soldiers backed by infantry from the Fourth Infantry Division and operating under cover of darkness, found $US750,000 in $US100 bills ($1.1million), a white and orange taxi, two Ak-47 rifles and a pistol.
Two other men, thought to be aides, have also been captured.
Soldiers sweeping the two farm compounds - codenamed Wolverine One and Two - initially could not find Saddam until they searched a mud hut a few hundred metres away from the main farm building and found the bolt hole.
Pictures shown at the news conference showed Saddam submitting to a medical exam. A series of slides showed the dishevelled ex-dictator with a shaggy beard and then shaved, with his moustache. He looked tired and drawn.
The pictures are a far cry from the defiant Saddam dressed in a military uniform who denounced the US-led military campaign eight months ago saying he would be victorious.
General Ricardo Sanchez said Saddam has been co-operating with authorities, both during his medical exam and during his transfer to an undisclosed detention facility.
Members of the 4th Infantry Division, which captured Saddam, celebrated by smoking cigars.
Herald Feature: Iraq
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Red Dawn ends one of history's biggest hunts
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