A Dutch court ordered the government to cut the country's greenhouse gas emissions by at least 25% by 2020.
Activists hope that the groundbreaking ruling will now set a worldwide precedent.
The Hague District Court made the ruling in a case brought by a sustainability organisation on behalf of some 900 citizens, claiming that the government has a duty of care to protect its people against looming dangers - including the effects of climate change on this low-lying country.
Climate activists in the packed courtroom cheered as Presiding Judge Hans Hofhuis read the ruling.
"A courageous judge. This is fantastic," said Sharona Ceha, who works for the Urgenda group that took the government to court.
"This is for my children and grandchildren."
Dutch government lawyers swiftly left the courtroom after the judgment and could not immediately be reached for comment.
The court said that, based on current government climate policy, the Netherlands will cut its emissions by only 17% by 2020, compared with benchmark 1990 levels.
"The state must do more to avert the imminent danger caused by climate change, also in view of its duty of care to protect and improve the living environment," read a statement from the court.