The 'Stronger' rapper was incensed after Taylor picked up the Best Female Video accolade for 'You Belong To Me', insisting Beyonce Knowles should have been rewarded for the promo for 'Single Ladies (Put A Ring On It)'.
As Taylor was giving her acceptance speech, Kanye - who had earlier been pictured drinking Hennessy on the red carpet - grabbed the microphone and called Beyonce's video "one of the greatest of all time".
Taylor said after the show: "I was standing on stage and I was really excited because I'd just won the award and then I was really excited because Kanye West was on stage. And then I wasn't excited anymore after that.
"I don't want to start anything. I had a great day. I've been sent so many text messages and everyone's been really nice. I've had a really, really fun night."
The crowd was furious with Kanye, and he exited the stage to a cacophony of boos. Taylor was given a standing ovation.
Host Russell Brand attempted to ease the situation, saying: "What we're celebrating tonight is love! Mutual love for everybody. Taylor Swift. Beyonce... Love for all of you!"
Afterwards, Kanye left New York's Radio City Music Hall and it is believed he was barred from returning.
A host of stars showed their support for 19-year-old Taylor after the incident, with many taking to Twitter to blast Kanye.
Pink wrote: "Kanye West is the biggest piece of s**t on earth. Quote me."
Katy Perry said: "F**K U KANYE. IT'S LIKE U STEPPED 0N A KITTEN (sic)."
After the show, Kanye took to his blog to apologise for his behaviour.
He wrote: "I'm in the wrong for going on stage and taking away from her moment. Beyonce's video was the best of this decade... I'm sorry to my fans if I let you guys down... I'm sorry to my friends at MTV... I will apologise to Taylor.
"I'm still very happy for Taylor. I really feel bad for Taylor and I'm sincerely sorry."
However, Taylor's moment in the limelight was not totally ruined.
When Beyonce took to the stage to receive her Video of the Year award for 'Single Ladies (Put A Ring On It)' she invited Taylor to join her and finish giving her speech.
Beyonce said: "This is amazing. I remember being 17-years-old, up for my first MTV award with Destiny's Child and it was one of the most exciting moments of my life, so I would like for Taylor to come out and have her moment."
Taylor gladly obliged, and thanked her fans for supporting her. She later called the move "wonderful and gracious" of Beyonce.
As well as winning the coveted prize, Beyonce also took home the Best Choreography and Best Editing accolades.
Lady GaGa was hot on her heels with three wins, picking up Best New Artist, Best Art Direction and Best Special Effects.
She said: "He was so unique, so original, so rare. He was a king. When I heard he passed all I could think about him in that one moment was, 'I had abandoned him,' that we had abandoned him."
After her speech, Janet Jackson took to the stage and performed a solo version of her and her brother's 1995 duet 'Scream'.
MTV Video Music Awards (VMAs) 2009 full list of winners:
Video of the Year: Beyonce Knowles - 'Single Ladies (Put A Ring On It)'
Best New Artist: Lady Gaga - 'Poker Face'
Best Hip-Hop Video: Eminem - 'We Made You'
Best Male Video: T.I. ft Rihanna - 'Live Your Life'
Best Pop Video: Britney Spears - 'Womanizer'
Best Rock Video: Green Day - '21 Guns'
Best Female Video: Taylor Swift - 'You Belong With Me'
Best Video (That Should Have Won A Moonman): 'Beastie Boys - Sabotage'
Breakthrough Video: Matt And Kim - 'Lessons Learned'
Best Art Direction: Lady Gaga - 'Paparazzi'
Best Choreography: Beyonce - 'Single Ladies (Put A Ring On It)'
Best Cinematography: Green Day - '21 Guns'
Best Direction: Green Day - '21 Guns'
Best Editing: 'Single Ladies (Put A Ring On It)'
Best Special Effects: Lady Gaga - 'Paparazzi'
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