The singer - full name Polly Jean Harvey - beat off competition from the likes of Elbow, Tinie Tempah, Katy B and Adele for the prestigious critics' award.
It is her second win after Stories from the City, Stories from the Sea in 2001. Let England Shake reached number eight in the UK album chart earlier this year.
Harvey thanked the judging panel for giving her the award, while also acknowledging the difficult circumstances behind her last win in 2001.
Watch Digital Spy interview the Mercury Prize nominees at the ceremony below:
"First of all, I'd like to thank you very much for this award," she said after being handed the prize from Jools Holland. "Thanks for the recognition for my work on this album.
"It's really good to be here, especially as when I last won on September 11, 2001, I was in Washington watching the Pentagon burning from a hotel window. So much has happened since then.
"This album had taken me a long time to write, and was very important to me. I wanted to make something that was meaningful, not just for me but for other people."
The Mercury Prize is in its 20th year, and is voted for by a panel of music industry executives and experts.
Previous winners include Elbow, Primal Scream, Arctic Monkeys, Pulp and last year's winners The xx.
PJ Harvey will play a one-off show at the Royal Albert Hall on October 30.
> PJ Harvey: 'Modern pop music is unoriginal'
Watch PJ Harvey's interview with BBC Radio 2's Huey Morgan: