The 25ft-long British Steam Car - nicknamed the 'fastest kettle in the world' - reached an average speed of 139.843mph on two runs over a measured mile at the Edwards Air Force Base in California.
World record! Charles Burnett III celebrates beside the British Steam Car in California, U.S., after smashing the land speed record for a steam powered car
Driver Charles Burnett beat the previous record of 127mph set by American Fred Marriott in a Stanley steam car at the Daytona Beach Road Course in 1906.
Mr Burnett said: 'It was absolutely fantastic. I enjoyed every moment of it.
Making history: The steam car sped around the track at 139mph, outstripping the 1906 time of 127mph by Fred Marriott in his Stanley Steamer
We reached nearly 140mph on the first run before I applied the parachute.
'The second run went even better and we clocked a speed in excess of 150mph. The car really did handle beautifully.
Against the clock: Charles Burnett III drives the British Steam Car past the measured mile marker
The new international record, which is subject to official confirmation by officials from the Federation Internationale de l'Automobile (FIA), followed a series of cancellations in the past week due to technical difficulties and bad weather.
Mr Burnett piloted the car for both runs, reaching a peak speed of 136mph on the first and 151mph on the second, a team spokesman said.
Well done! Mr Burnett celebrates with Pam Swanston, wife of the team's late project manager Frank Swanston
Congratulations: FIA official Mike Cook shakes hands with Mr Burnett as he gets out of his vehicle
Record officials recognise a land speed record as the average speed of two passes made across the same measured distance in opposing directions within 60 minutes of each other.
Mr Burnett is a nephew of Lord Montague of Beaulieu, who made it into the Guinness Book of World Records in 1999 for an offshore water speed record of 137mph.
Other members pf the team, based in Lymington, Hampshire, included 48-year-old test driver and father-of-two Don Wales, nephew of the late speed ace Donald Campbell and grandson of Sir Malcolm Campbell.
Weighing three tons, the British Steam Car is made from a mixture of lightweight carbon-fibre composite and aluminium wrapped around a steel space frame chassis.
It burns Liquid Petroleum Gas (LPG) in 12 boilers containing nearly two miles of tubing.
Demineralised water is pumped into the boilers at up to 50 litres a minute to cool the blistering burners, which produce three megawatts of heat.
Steam is superheated to 400C and injected into the turbine at more than twice the speed of sound.
The car is brought to a stop by Large Goodyear tyres, brake discs and a parachute.
Project manager Matt Candy said the team turned the car around for its second run with just eight minutes to spare before they would have breached FIA rules.
An overjoyed Mr Candy said: 'The first run took place at 7.27am (local time) when the air temperature was a cool 63 degrees.
'The team turned around the car in 52 minutes, with just eight minutes to spare in preparation for its return run.
'The British Steam Car takes 2.5 miles to accelerate and after the measured mile, a further 2.5 miles to decelerate, so each run was over 6.5 miles.
'The FIA requires that the return run takes place within 60 minutes.
'Compared to the testing we did in Britain, the British Steam Car ran 12 times the distance and twice the maximum speed - all within one hour.
'It's been a huge challenge for all.'
Watching the triumph in the Mojave Desert was Pam Swanston, wife of the team's late project manager Frank Swanston.
She said: 'If only Frank was here today. It was his vision that made it a reality. He would be incredibly proud of the team's achievements and always believed we would succeed.
'Today we celebrate this record for Frank.'
Although the team broke the official world land speed record for a steam-powered vehicle, their efforts fell short of an unofficial record set in 1985.
The Barber-Nicholls team reached a speed of 145mph in their vehicle, Steamin' Demon, but no attempt was made to have it officially recognised by the FIA.
HOW IT WORKS: The engine uses propane gas and 12 boilers to generate the 3MW heat needed to create the steam. The steam flows through more than a mile of tubing to a turbine which drives the rear wheels forward
Before the attempt in California, officials from the British Steam Car said they acknowledged the 1985 attempt as the record to exceed.
A spokesman for the British team said they intended to stay on in California in an effort to emulate the Barber-Nicholls speed tomorrow.
Record holder: Fred Marriott in his Stanley Steamer, which held the world land speed record for 103 years
British steam car from an on board camera: