Beyonce bagged six awards, a record for a female artist, while 20-year-old Taylor became the youngest artist to win a Grammy by picking up the award for album of the year.
The previous record was held by Alanis Morissette who was 21 when she won the same award for her 1996 album Jagged Little Pill.
But country singer Taylor didn't stop at just one Grammy; she also took home the gongs for best country album, best country song, and female country vocal performance.
Clearly stunned by her own success, Taylor leapt from her seat as her name was read out and put her head in her hands as she walked to the stage to collect the album of the year award. She wore a huge smile as she thanked the crowd, and told them with a slightly shaky voice: "Wow thank you so much. I hope you know how much this means to me."
She then joked that she would be annoying her grandchildren with tales of the night when she was 80.
Beyonce acknowledged her success with a tribute to her family. She said: "I'd like to thank my family including my husband, I love you." The pop starlet walked away with trophies for song of the year, best female pop vocal performance, best female R&B vocal performance, best traditional R&B vocal performance, best R&B song, and best contemporary R&B album.
Entertainment was provided by Lady Gaga who put on a typically extravagant show with pyrotechnics and a duet with Elton John that featured duelling pianos covered in clawed hands and glitter painted faces.
She later enjoyed more success picking up the best electronic/dance album award for The Fame and best dance recording for her smash hit single Poker Face.
Click next to see the full winners list...
Check out more of the winners below:
BEST FEMALE POP VOCAL PERFORMANCE
Halo - Beyoncé
BEST MALE POP VOCAL PERFORMANCE
If You Don't Know Me By Now - Seal
BEST POP PERFORMANCE BY A DUO OR GROUP WITH VOCALS
I Gotta Feeling - The Black Eyed Peas
BEST POP VOCAL ALBUM
The E.N.D. - The Black Eyed Peas
BEST DANCE RECORDING
Poker Face - Lady Gaga
BEST TRADITIONAL POP VOCAL ALBUM
Michael Buble Meets Madison Square Garden - Michael Buble
BEST SOLO ROCK VOCAL PERFORMANCE
Working On A Dream - Bruce Springsteen
BEST ROCK ALBUM
21st Century Breakdown - Green Day
BEST RAP SONG
Run This Town - Jeff Bhasker, Shawn Carter, Robyn Fenty, Kanye West & Ernest Wilson, songwriters (Jay-Z, Rihanna & Kanye West)
BEST FEMALE COUNTRY VOCAL PERFORMANCE
White Horse - Taylor Swift
BEST MALE COUNTRY VOCAL PERFORMANCE
Sweet Thing - Keith Urban
RECORD OF THE YEAR
Use Somebdoy - Kings of Leon