Real Madrid finally defeated archrivals Barcelona 1-0 after extra time in a dramatic finale to win the Spanish Cup for the first time since 1993.
A header from Cristiano Ronaldo sealed the championship, delivering coach Mourinho's first trophy since joining the club last May.
As the final whistle blew in Valencia, fans in Madrid honked car horns and descended into the streets wrapped in the Real Madrid and Spanish flags or waving them in joy.
In central Cibeles Square, traditional home of Real Madrid victory celebrations, thumping music blared into the early hours, lights beamed the team logo across the city hall facade, and fans chanted: “Champions, Champions.”
Last weekend Real ended a run of five straight defeats against Barca with a 1-1 draw in the league but at the Mestalla Stadium they went one better with their first trophy since 2008.
There still remain two more mouth-watering matches between the rivals in the Champions League on April 27 and May 3.
"This victory was for the fans as things haven't gone well at the club over the last few years.
“Mourinho is phenomenal," said Real goalkeeper Iker Casillas.
Mourinho admitted that there was little to choose between the teams.
"I thought it was a great game where players worked hard, were concentrated and did what they had to do," he said.
"Barca are a side which is used to winning and when they didn't score they became frustrated. I was told recently that I was a great coach for titles but not for football -- I am happy to remain that way. I have won four cups now in four countries."
Ramos drops Cup under a bus
Sergio Ramos suffered an embarrassing mishap during Real Madrid's celebration when he dropped the trophy off the top of a bus at their victory parade. Ramos, one of the club captains, had the Cup on top of his head as the bus inched past thousands of Real fans celebrating in the centre of the Spanish capital. "The Cup has fallen, the Cup has fallen," local media quoted him.