The UN cultural organisation has voted strongly in favour of membership for the Palestinians - a move opposed by Israel and the United States.
Of 173 countries voting, 107 were in favour, 14 opposed and 52 abstained.
Under US law, Washington can now withdraw funding to Unesco. This would deprive the agency of some $70m (£43.7m) - more than 20% of its budget.
The UN Security Council will vote in November on whether Palestine should become a full UN member state.
Membership of Unesco - perhaps best known for its World Heritage Sites - may seem a strange step towards statehood, says the BBC's Jon Donnison, in Ramallah, but Palestinian leaders see it as part of a broader push to get international recognition and put pressure on Israel.
This is the first UN agency the Palestinians have sought to join since submitting their bid for recognition to the Security Council in September.
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Palestinian UN Statehood Bid
- Palestinians currently have permanent observer entity status at the UN
- They are represented by the Palestine Liberation Organisation (PLO)
- Officials now want an upgrade so a state of Palestine has full member status at the UN
- They seek recognition on 1967 borders - in the West Bank, including East Jerusalem, and Gaza
- Enhanced observer member status could be an interim option
"This vote will erase a tiny part of the injustice done to the Palestinian people," Palestinian Foreign Minister Riyad al-Malki told the Unesco meeting in Paris, after the result was announced.
Funding at stake The UN Security Council is expected to vote on that bid in November. The United States has said it will use its veto.
But at the United Nations Educational, Scientific and Cultural Organization, the US does not have veto power.
"The action today will complicate our ability to support Unesco," the US ambassador to Unesco said after the vote.
"The US has been clear for the need of a two-state resolution, but the only path is through direct negotiations and there are no shortcuts, and initiatives like today are counterproductive," David T Killion told journalists.
A US law passed in the 1990s allows Washington to cut funding to any UN body that admits Palestine as a full member.
That amounts to $70m - more than 20% of Unesco's entire budget.
Widespread applause greeted the result of Monday's vote in the chamber, where a two-thirds majority is enough to pass the decision.
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