People gathered on the streets of Sarajevo on Monday night to celebrate the arrest of Radovan Karadzic. He is charged with genocide.
Cars streamed through the streets tooting their horns.
Bosnian state radio played excerpts of Karadzic's speeches during the 1992-95 war when he led Bosnian Serbs, backed by Belgrade, against Bosnian Muslims and Croats.
He is charged with genocide over the massacre of 8000 Bosnian Muslim men and boys in Srebrenica. He was arrested in Serbia on Monday after 11 years underground.
Government sources said he had been under surveillance for several weeks after a tip-off from a foreign intelligence service.
His wartime military leader Ratko Mladic remains at large.
The arrest of Karadzic, 63, and other indicted war criminals is one of the main conditions of Serbian progress towards membership of the European Union.
Karadzic was indicted by the United Nations war crimes tribunal in The Hague in 1995 for authorising the shooting of civilians during the 43-month siege of Sarajevo.
He was indicted for genocide a second time four months later for orchestrating the slaughter of 8000 Muslims after Mladic's forces seized the UN "safe area" of Srebrenica in eastern Bosnia.
Former United States assistant secretary of state for Europe, Richard Holbrooke, welcomed his capture, describing him as the "Osama bin Laden of Europe".