The award, called "The Heart of Sarajevo," was handed to Jolie by festival director, Miro Purivatra, who said it was being given to her not only for her great impact in the movie industry, but also "for persisting in her active engagement in the complexities in the real world we live in."
Jolie visited Bosnia several times last year as UNHCR ambassador and drew attention to the plight of 117,000 people who haven't able to return to their homes even though the Bosnia war ended 16 years ago. Accompanied by Brad Pitt, she visited several refugee camps. The visit resulted in a U.S. government donation that provided housing for the last 15 people living in one of the rundown facilities.
"I told Brad in the car I was afraid I was going to cry," she said with tears in her eyes as the audience gave her a standing ovation at the Sarajevo National Theater.
Jolie said she experienced the "warmth and hospitality" of the city during her visits and was honored to receive the award - a silver heart she took out of the box and pressed against her chest.
"There is no greater example of the strength of artists than a festival that begun during the war and grows stronger every year. I find it remarkable," she said.
Jolie and Pitt later watched a film about refugees by Oscar-winning Bosnian director Danis Tanovic.
The Sarajevo Film Festival started in 1994 in the besieged city, as its founders tried to offer citizens some sense of normal life. Residents braved mortar shells raining on the city to gather in a downtown basement and watch Quentin Tarantino's "Pulp Fiction," sometimes unsure whether the sounds of shooting came from the soundtrack or battles outside.
The next year, filmmakers shipped boxes of videotapes to Sarajevo along with food deliveries. Now, thousands from the region flock to Sarajevo every year to spend several days watching movies in more than 10 locations, and nights partying at concerts and other after-screening events.
Last year, Jolie shot some of the scenes of her first movie as director - a love story between a Serb man and Bosnian Muslim woman who fall in love and get separated during the war - in Bosnia. The film, "In the Land of Blood and Honey," will be released in December and casts local actors.
"In my career, I have never worked with such disciplined and talented artists," she said.
The project was overshadowed for a while by rumors that her movie featured a rape victim who falls in love with her assailant. This angered The Association of Women Victims of War, made of Bosnian wartime rape victims. They protested the production, claiming they were insulted by such a story line.
Mass rape was a taboo topic in the immediate aftermath of the country's 1992-95 war between Serb and Bosnian Muslim forces, but since then victims have formed a group to campaign for their rights, which has become one of the country's most powerful lobbies.
Jolie's filming permit was even briefly withdrawn but given back when her producers proved the rumor was not true and the entire Bosnian art community voiced support for her.
This year's festival hosted among others German director Wim Wenders and actress Charlotte Rampling. Over eight days, about 100,000 viewers watched over 200 films from dozens of countries.
Promoted in part by the festival, Bosnia is experiencing a film boom, despite its poverty. The country's filmmakers have won prestigious awards, including a foreign-film Oscar for Danis Tanovic's "No Man's Land" in 2002 and the Berlin Film Festival's Golden Bear for Jasmila Zbanic's "Grbavica" in 2006.
The festival has hosted stars such as Kevin Spacey, Morgan Freeman, Michael Moore, Daniel Craig and Mickey Rourke.