Canon Joanna Penberthy, 56, was confirmed as the 129th Bishop of St Davids in Pembrokeshire.
Her appointment comes after an electoral college of 47 people spent two days locked inside St David's Cathedral considering the options.
She is the first woman to take a role as bishop despite the Church in Wales voting to allow females into senior clergy in September 2013.
Archbishop of Wales Dr Barry Morgan said: "This is an historic moment for the Church in Wales as it hasn't been possible to elect a woman bishop until now.
"But what is really important to stress is that Joanna wasn't elected because she was a woman but because she was deemed to be the best person to be a bishop.
"She has considerable gifts - she is an excellent preacher and communicator, can relate to all sections of the community, is a warm, charismatic, caring priest and someone who is full of joy."
Canon Penberthy said: "I am immensely humbled and honoured at the trust that has been placed in me. I am very much looking forward to returning to St Davids and serving God's people as their Bishop."
She will be enthroned in St Davids Cathedral on February 11.
