The nine-judge bench ruled that the right to privacy "is protected as an intrinsic part of Article 21 that protects life and liberty".
The verdict came in response to privacy concerns over a controversial government biometric ID card scheme.
Rights groups are concerned personal data could be misused. The authorities want registration to be compulsory.
The verdict overturns two previous rulings by the top court which said that privacy was not a fundamental right.
Speaking to reporters outside court, lawyer Prashant Bhushan, who represented the petitioners, described the ruling as historic.
He said that a smaller bench would now look into the validity of the Aadhaar scheme.