The jury, headed by director Quentin Tarantino, unanimously chose Coppola's film as the best movie at the 11-day annual festival.
The buzz in the final days of the festival had pegged "Somewhere" as a sure winner, and on Saturday the jury appeared to have had no doubts, either.
"This film enchanted us from its first screening," Tarantino said. "It has the artistry we were looking for in a Golden Lion" winner, he told the closing ceremony.
Coppola has described the film, which made its world premiere at Venice, as a "portrait of today's L.A."
In "Somewhere," Stephen Dorff plays a Hollywood star whose somewhat empty life is enriched by the arrival his daughter, played by Elle Fanning. The film takes place nearly entirely in hotels, mostly the Chateau Marmont in Los Angeles.
Coppola, 39, herself grew up in the world of film thanks to her father, director Francis Ford Coppola. When presenting the film, Coppola reminisced that she and her family spent a lot of time growing up in hotels where her father was out on location while filming.
When the film was screened at Venice, early in the festival, Coppola told reporters her father "loved" it.
"Thanks to my dad for teaching me," Coppola said, accepting the award.
Other awards included the Silver Lion for best director, which went to Alex de la Iglesia for his "Balada triste de Trompeta" ("A Sad Trumpet Ballad"). The Spanish director also won the best screenplay award for the film.
The top actor award was given to Vincent Gallo, who played a terror suspect plotting his escape in "Essential Killing," by Polish director Jerzy Skolimowski. Best actress honors were awarded to Ariana Lebed, a Greek actress who discovers herself through her friendships, in "Attenberg," a film by Greek director Athina Rachel Tsangari.