Rarely has she spoken in such personal terms about her Christian belief and sense of spirituality.
Adopting the role of a lay preacher, the Queen said: "To many of us our beliefs are of fundamental importance. For me the teachings of Christ and my own personal accountability before God provide a framework in which I try to lead my life."
She told a worldwide television, radio and Internet audience: "I, like so many of you, have drawn great comfort in difficult times from Christ's words and example."
This year's Royal Christmas Day broadcast, expressing the personal thoughts of the Queen, was devoted to a religious theme.
It was primarily a Christian message but the Queen mentioned the teachings of other great faiths and recognised that some people did not believe in God.
The TV version, beginning with Big Ben chiming midnight on Millennium Eve and the Queen celebrating with Prime Minister Tony Blair at the Dome in Greenwich, featured film of her October visit to the Vatican where she met Pope John Paul II.
Later, there was footage of a conversation in London between the Queen and the Archbishop of Canterbury, Dr George Carey, who spoke of church denominations moving closer together.
"I think your presence there would have been a huge encouragement for all the churches," Dr Carey told the Queen, referring to her trip to Rome.
Film also featured the lighting of the Olympic flame in Sydney by Australian athlete Cathy Freeman, followed by scenes of a Buckingham Palace reception for Britain's Olympians, showing gold medalists Steve Redgrave and Denise Lewis.
Prince William, 18, was pictured twice - in Cardiff, for a Millennium Service, and in Chile, during his university gap-year, chopping wood.
His father, the Prince of Wales, was featured also in Cardiff and on the set of the long-running TV soap, Coronation Street.
The Queen Mother was shown celebrating her 100th birthday and US President Clinton visiting the Queen at the Palace.
Actor Sir Sean Connery was pictured receiving his knighthood at Holyroodhouse Palace in Edinburgh and the Royal Ulster Constabulary was featured receiving the George Cross in Belfast.
There was film of the Queen's trip to Australia, and visits nearer home to Newcastle and Sunderland, and London's East End where she met a former homeless woman and saw her flat provided by a housing charity for young people.
A wider Commonwealth dimension was contained in footage of former South African President Nelson Mandela lighting a Millennium beacon.
The two-minute montage of images from the year, illustrating the Royal Millennium diary, introduced the Queen's address, which was recorded in the Belgium Suite at the Palace on Friday.
The Queen said: "By any measure this Millennium year has been an unforgettable one.
"But as this year draws to a close I would like to reflect more directly and more personally on what lies behind all the celebrations of these past 12 months.
"Christmas is the traditional, if not the actual, birthday of a man who was destined to change the course of our history. And today we are celebrating the fact that Jesus Christ was born 2000 years ago; this the true Millennium anniversary."
She spoke of the life of Jesus, the carpenter and preacher who was crucified.
"His death might have been the end of the story, but then came the resurrection and with it the foundation of the Christian faith.
"Many will have been inspired by Jesus' simple but powerful teaching: love God and love thy neighbour as thyself - in other words, treat others as you would like them to treat you. His great emphasis was to give spirituality a practical purpose."
The Queen spoke of spirituality in the teachings of religions other than Christianity and among non-believers despite a materialistic world.
"Whether we believe in God or not, I think most of us have a sense of the spiritual, that recognition of a deeper meaning and purpose in our lives, and I believe that this sense flourishes despite the pressures of our world.
"This spirituality can be seen in the teachings of other great faiths. Of course religion can be divisive, but the Bible, the Koran and the sacred texts of the Jews and Hindus, Buddhists and Sikhs, are all sources of divine inspiration and practical guidance passed down through the generations."
Reading from the 1928 Prayer Book, she said: "I believe that the Christian message, in the words of a familiar blessing, remains profoundly important to us all: `Go forth in to the world in peace, be of good courage, hold fast that which is good, render to no man evil for evil, strengthen the fainthearted, support the weak, help the afflicted, honour all men.'
"It is a simple message of compassion and yet as powerful as ever today, 2000 years after Christ's birth."
The broadcast, produced by the BBC and for the first time aired live on the Palace web site, will be made by ITN for the next two years.
The full text of the message can be found on the Royal Family's web site at www.royal.gov.uk.