Shinya Yamanaka of Japan and John B Gurdon of Britain have won the Nobel Prize for medicine for their groundbreaking work on stem cells.
The prize committee at Stockholm's Karolinska Institute said on Monday that the two researchers were honoured "for the discovery that mature cells can be reprogrammed to become pluripotent".
The committee said the discovery had "revolutionised our understanding of how cells and organisms develop".
The award was the first Nobel Prize to be announced this year.
The physics award will be announced on Tuesday, followed by chemistry on Wednesday, literature on Thursday and the Nobel Peace Prize on Friday.
The economics prize, which was not among the original awards, but was established by the Swedish central bank in 1968, will be announced on October 15.
Gurdon is currently at the Gurdon Institute in Cambridge, while Yamanaka is a professor at Kyoto University in Japan.
Because of the economic crisis, the Nobel Foundation has slashed the prize sum to eight million Swedish kronor ($1.2 million, 930,000 euros) per award, down from the 10 million kronor awarded since 2001.
Last year, the honour went to Bruce Beutler of the United States, Jules Hoffmann of Luxembourg and Ralph Steinman of Canada, for their groundbreaking work on the immune system.
This year's laureates will receive their prize at a formal ceremony in Stockholm on December 10, the anniversary of prize founder Alfred Nobel's death in 1896.