The pair won the award "for their efforts to end the use of sexual violence as a weapon of war and armed conflict," the Nobel committee chairwoman, Berit Reiss-Andersen, said in unveiling the winners in Oslo, AFP reported.
"A more peaceful world can only be achieved if women and their fundamental rights and security are recognized and protected in war," she said.
One a doctor, the other a former Daesh sex slave, both have come to represent the struggle against a global scourge which goes well beyond any single conflict, as the #MeToo movement has shown.
The prize was announced as #MeToo marks its first anniversary after a year in which allegations of sexual abuse, rape and harassment have toppled dozens of powerful men.
By recognizing the pair's work, the Nobel committee has placed a spotlight on the use of sexual violence in war as a global problem.
'Weapon of mass destruction'
Mukwege, 63, was recognized for two decades of work to help women recover from the violence and trauma of sexual abuse and rape in the war-torn eastern Democratic Republic of Congo.
Women, children and even babies just a few months old, Mukwege has treated tens of thousands of victims of rape at Panzi hospital which he founded in 1999 in South Kivu.
Known as "Doctor Miracle", he is an outspoken critic of the abuse of women during war who has described rape as "a weapon of mass destruction".
"Denis Mukwege is the foremost, most unifying symbol, both nationally and internationally, of the struggle to end sexual violence in war and armed conflicts," Reiss-Andersen said.
Alongside Mukwege, the committee honored Murad, a 25-year-old Iraqi woman from the Izadi community who in 2014 was kidnapped by Daesh and endured three months as a sex slave before managing to escape.
She was one of thousands of Izadi women and girls who were abducted, raped and brutalized by terrorists during their assault that year on the Kurdish-speaking minority, which the United Nations has described as genocide.
Her nightmare began when the terrorists stormed her village in northern Iraq in August 2014. From there she was taken to Mosul where she was repeatedly gang-raped, tortured and beaten.
After her escape, she quickly became a figurehead for efforts to protect the Izadi community and was later named a UN ambassador for victims of human trafficking.
The Nobel committee said Murad had shown "uncommon courage" in recounting her own sufferings and speaking up on behalf of other victims.
"She refused to accept the social codes that require women to remain silent and ashamed of the abuses to which they have been subjected."
'Personal security at risk'
Both Mukwege and Murad had "put their personal security at risk" by focusing attention on and combating such war crimes, Reiss-Andersen said.
"Denis Mukwege is the helper who has devoted his life to defending these victims. Nadia Murad is the witness who tells of the abuses perpetrated against herself and others.
Mukwege and Murad will share the prestigious prize of a gold medal, a diploma and a check for nine million Swedish kronor – almost $1 million or €863,000.
The award will be presented at a ceremony in Oslo on December 10, the anniversary of the death of prize creator Alfred Nobel, a Swedish philanthropist and scientist who died in 1896.