In a final too close to predict, the 24-year-old singer-songwriter from Middlesbrough snatched the title from Asda worker Jahmene Douglas.
Arthur hugged his rival after the announcement by TV talent show host Dermot O'Leary.
He said: "Thank you to all of you who voted for me. I am so thankful."
Congratulating his fellow contestant, Douglas advised him to "use this platform, use it wisely".
Arthur will now be releasing his winner's single, a cover of singer Shontelle's 2010 top ten hit Impossible.
He performed the song last night in front of the X Factor judges and 10,000 people packed into the Manchester Central arena.
Judge Louis Walsh told him: "That was a powerful, powerful performance - the X Factor is going to change your life."
Fellow judge Tulisa Contostavlos added: "From the second I saw you perform, I got you, I get you, you have been to the deep dark depths in life and you came back out with heart. You deserve to win this competition."
Take That star Gary Barlow praised his credibility and told him not to let anyone tell him what to do.
The fourth judge, Nicole Scherzinger, said: "You have proven tonight that anything is possible. You better get ready because your life is never going to be the same after this."