Figures for the last three months of 2013 showed there were 2,556,000 Scots in employment - a rise of 9000 on the previous quarter and 92,000 more than the same period in 2012.
The number of women in work increased by 72,000 over the year, with female employment reaching its highest ever total at 1,243,000.As well as the rise in employment, new figures from the Office for National Statistics showed the jobless total continued to fall.
Unemployment, including those who are out of work and not eligible for benefits, dropped by 3000 between October and December last year to stand at 195,000.
The number of people not working and claiming jobseekers' allowance also fell by 2900 between December and January, to a new total of 110,400 - the 15th month in a row this has fallen. The unemployment rate in Scotland is 7.1%, slightly below the rate of 7.2% for the UK as a whole.
First Minister Alex Salmond hailed the increase. "Delivering the largest annual increase in employment levels in nearly seven years is a demonstration of this Government's commitment to creating jobs and boosting the economy," he said.
But he claimed the Scottish Government's work to boost the economy was held back by the UK Government's austerity programme. Mr Salmond said: "While we are making good progress, we continue to do so constrained by a Westminster Government's pursuit of austerity. Only with the full fiscal and economic powers of independence can we take a different approach, focused on maintaining and building sustainable economic growth, do more to strengthen our economy and create jobs."
Youth Employment Minister Angela Constance said: "Women are key to Scotland's economic growth and seeing such a strong increase in female employment over the year follows the Scottish Government's action to tackle the barriers faced by women seeking employment."
But UK Employment Minister Esther McVey said: "With Scotland seeing a record number of women in work - 1.24 million - it's clear that the Government's long-term plan to build a stronger, more secure economy is helping businesses create jobs and get people into work."
Scottish Secretary Alistair Carmichael said the figures showed Scotland's economy was growing as part of the UK. He said: "Employment increasing, unemployment decreasing and a fall in the number of Scots claiming jobseekers' allowance for the 15th straight month is good news.
"With business confidence continuing to grow, more jobs are being created and inflation is now below the 2% Government target. Together with the Bank of England revising up its forecast for GDP growth in 2014, it is clear that being part of a large UK single market and an influential EU member benefits Scotland. Our economy is growing because we are part of the UK."
LibDem leader Willie Rennie said: "With Liberal Democrats in UK Government, we are building a stronger economy which is enabling more people to get on in life." But Labour finance spokesman Iain Gray said there were 65,000 fewer Scots in work than there were before the start of the recession.
"These figures show that employment is continuing to stagnate under the SNP Government who are doing little to improve the prospects of Scots," he claimed.