Chosen by a panel of music critics and industry experts, 12 albums have been confirmed for this year's shortlist.
Jessie Ware's debut album Devotion, quirky Scottish band Django Django's self-titled LP and Plan B's soundtrack to his film iLL Manors are among the nominations.
> Barclaycard Mercury Prize 2012: Who should be nominated?
Early favourites Alt-J are recognised for An Awesome Wave, along with Richard Hawley's critically acclaimed Standing at the Sky's Edge.
BBC Sound of 2012 winner Michael Kiwanuka is nominated for Home Again, and will face off against Ben Howard's Every Kingdom and Lianne La Havas's debut Is Your Love Big Enough.
The shortlist is completed by Given to the Wild by The Maccabees, Roller Trio's self-titled LP, Field Music's Plum and Sam Lee's Ground of Its Own.
Among the absentees are Kate Bush's 50 Words for Snow, Bright Light Bright Light's Make Me Believe in Hope and Emeli Sandé's Our Version of Events.
"This year's Barclaycard Mercury Prize shortlist showcases a wonderful variety of musical voices, emotions and ambitions", says Mercury Chair of Judges Simon Frith.
"There are eight debut albums on the list and four albums from more established artists. The sheer range of music here celebrates the abiding ability of British musicians to find new ways to explore traditional themes of love and loss while making an exhilarating soundtrack for life in 2012."
The shortlist was chosen out of over 250 albums, and was announced by Lauren Laverne at The Hospital Club in Covent Garden, London.
The winner will be announced at the Barclaycard Mercury Prize Awards Show at the Roundhouse on Thursday, November 1.
PJ Harvey won her second Mercury Prize last year with Let England Shake.
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Mercury Prize 2012: Nominees in pictures - photo gallery