Ivana Zambrano Sánchez, of the 1,300-inhabitant village of Almendral in Extremadura, western Spain, became the first transsexual person to be awarded such an honour in the region.
She was nominated for the competition by the town and voted for by local residents.
According to local daily Hoy, Ivana made an emotional journey to the stage when her name was called out.
The crowd shouted "Ivi! Ivi!" as she thanked her supporters before turning her attention to those who did not agree with her victory.
"To those who do not see it as right that I should be here, I'm sorry, but this is how I feel and I have the same right as anyone else," she said.
She then left the stage, wearing her winner's sash and clutching a bouquet of flowers.
A YouTube video of her acceptance has been widely shared via social media.
Lesbian, Gay, Bisexual and Transgender (LGBT) groups have hailed Ivana's victory as pioneering.
The Extremadura Triangle Foundation issued a note stating that the election of a transsexual girl as Maid of Honour in a village fete was an important step in the road to equality for transsexual people in rural areas.
President José María Nuñez said: "It is tremendously positive that transsexual people occupy visible roles in rural areas because only through visibility can we break the stigmas and negative stereotypes that are applied to transsexual men and women."