(AP Photo/Matt Sayles)
It was the rockers' only win on the night; they had been nominated for two other awards.
Arcade Fire beat out Lady Antebellum's "Need You Now," Katy Perry's "Teenage Dream," "The Fame Monster" by Lady Gaga and Eminem's "Recovery" -- 2010's best selling album.
This is now the third time Eminem has lost the best album trophy. He led all nominees with 10 and won two.
Lady Antebellum's yearning crossover ballad "Need You Now" captured record and song of the year honors at the Grammy Awards on Sunday night, two of the country trio's leading five trophies on a night that was short on awards but heavy on spectacle performances.
The ceremony also had a huge upset, as Esperanza Spalding -- a jazz bassist and singer who sold a fraction of favorite Justin Bieber's music -- beat the 16-year-old pop phenomenon, and also Florence & the Machine, Mumford & Sons and Drake for best new artist.
She is the first jazz artist to ever win the category.
"I take this honor to heart so sincerely and I'll do my damnedest to make great music for all of you. It's such an honor and God bless," said a shocked Spalding, who released her third album, "The Chamber Music Society," last year.
The evening's other top winners included Jay-Z, John Legend, and Lady Gaga, who each had three trophies; Muse, who won best rock album; and Train, whose "Hey, Soul Sister (Live)," one of the year's top songs, captured best pop performance by a duo or group with vocals.
"Thanks, Justin Bieber, for not being a duo or group," joked frontman Pat Monahan.
Eminem entered the evening as the top nominee with 10, but only won best rap solo performance and rap album. The rapper had 2010's best-selling album with "Recovery" and the critically acclaimed album marked a rebirth for the Eminem.
The Grammys give out 109 awards -- but most of those are doled out before the live telecast in a ceremony before the CBS show. Instead of focusing on the awards, the Grammy show emphasized performances with extravagant showcases to the that featured the year's most celebrated artists, along with emerging acts and true legends.
Lady Gaga entered the Staples Center, where the Grammys were held, in dramatic fashion, encased in an egg as dancers carried her to the stage. When she "hatched," she seemed to have turned into Madonna, circa 1987, as she sashayed across the stage to her new song "Born This Way."
But the singer, normally the most outrageous performer on any bill, was out-Gaga'd by Cee Lo Green, Gwyneth Paltrow and Jim Henson Co.'s puppets, who gave a hilarious performance of "Forget You" that would have done Elton John proud.
Decked out in feathers of seemingly every hue, Green -- who was nominated for record and song of the year for the dirty version of the song, "(Expletive) You," crooned alongside a sassy gaggle of puppets and Paltrow, who performed "Forget You" on the Fox TV show "Glee." The actress, who recently played a singer in the movie "Country Song" and is slated to sing on the Oscars telecast, perhaps should seriously consider joining hubby Chris Martin of Coldplay as a regular recording artist.
It was easily the show stopper in a night of performances that included a tribute to Aretha Franklin, a retro performance from Bruno Mars, a dazzling number by newcomer Janelle Monae that was James Brown-esque, a collaboration with Mumford & Sons, the Avett Brothers and a raspy Bob Dylan.