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The UK capital beat cultural hotspots New York, Paris and Rome plus a string of beach paradises to claim the number one spot.
London came top of three lists -- best in Britain, best in Europe and best in the world -- in a survey of millions of people.
In the world list, New York was second, Rome third and Paris fourth.
Rome was second and Paris third in the best European destination list, with Dublin in ninth place and Edinburgh 13th.
In the list of best UK destinations, Edinburgh was second, Liverpool third and Torquay, Devon, fourth.
"To be crowned the world's best destination in the Olympic year by millions of travellers is a tremendous honour for London," the Sun quoted Emma Shaw, spokeswoman for TripAdvisor, who polled travellers worldwide as saying.
"It's fantastic to see the capital recognised and rewarded by those that have really experienced the city -- travellers themselves," she said.
The top ten holiday destinations are:
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LondonNew York CityRomeParisSan FranciscoMarrakech, MoroccoIstanbulBarcelonaSiem Reap, CambodiaBerlin
