In an emotionally charged acceptance speech, the 26-year-old from Fife picked up £10,000 for his show Monkey See Monkey Do which deals with his personal experience of being sexually assaulted.
He was the first Scot to be nominated for the Edinburgh festival award in 23 years and is the first Scottish winner since Arnold Brown in 1987.
He told a packed audience at the Dovecot Studios: “Thank you to my parents… I’m a complicated person if I wasn’t born into such a liberal family I would have felt so much shame. The darkness that came over me… this goes in some way to getting that back.”
After receiving his prize, sponsored by lastminute.com, Gadd told Daily Business: “ I doubted whether I would should do it. I was ashamed but I decided to confront my experience. It was better not to keep it bottled up.”
Scott Gibson scored a double for Scotland by being named Best Newcomer, receiving a £5,000 prize.
The panel prize went to Iraq Out Loud which involved1,444 comedians and members of the public reading the Chilcott Report. It was also awarded £5,000.
Comedy actor Omid Djalili who took part said: “This is an award for the comedy industry because we will not take bullshit.”
Nica Burns, director of the lastminute.com Edinburgh Comedy Awards, said: “A record- breaking year for Scotland with a double Scottish win.
“Richard Gadd’s highly original, extraordinary show combines hilarity and heart and Scott Gibson is a brilliant stand-up who can make a near-death experience funny.”
The Awards were presented by last year’s Best Comedy Show winner Sam Simmons and 2016 Best Newcomer, Sofie Hagen.