Yahoo!7 Travel, which provides news, online travel guides, booking and reservation services, has rated it the fourth-best in the world.
The Queenstown event ranked higher than the New Orleans Jazz Festival, Pamplona's Running of the Bulls, Oktoberfest in Germany and the Sydney Festival and Melbourne Comedy Festival.
Festival director Simon Green said he was "rapt" with the result, which was a testament to everyone who had worked on the festival since it began in 1975.
"The festival originally started because some locals thought the start of winter was a great excuse for a party, so they organised some mountain races, a couple of concerts and a ball.
"Everyone thought it was such a great idea that it just snowballed and people started coming from all around the district.
"Over the years, it's evolved into the southern hemisphere's biggest winter party and now takes a whole year to plan.
"Some things never change though. The best thing about our festival is that it [is] still true to its roots.
"It's run by the people for the people and is all about celebrating who we are, what we are and where we are.
"For locals, its a great chance to get together and celebrate winter living and for visitors it's a great time to come because town is absolutely buzzing, the skifields are open and there's a real party atmosphere."
Mr Green said every year the organisers ensured there were accessible and free events to keep the community involved - this year about 75% of events would be free.
The 2010 Queenstown Winter Festival runs from June 25 to July 4.
