Her second album came out in March, debuted at Number One in the UK charts and includes the singles Click Clack Symphony (featuring Hans Zimmer), I Know You're Hurting, Nightingale Lane and Where Is My Husband!
The 28-year-old British singer, whose real name is Rachel Keen, beat fellow nominees such as rapper Dave, Florence + the Machine, and Suede, at a ceremony in Newcastle.
"I've always banged on about how much I believe in albums," Raye said in an emotional winner's speech.
"I wanted to make seven minute songs.
"I wanted to go to a big band section 'there', and do strings 'there', and, like, just be really indulgent."
Referring to the album's title, she said: "Hope is a very cheesy word, you know, especially for us British people.
"We don't do that kind of deep stuff like that, but hope is just something that we all need, and music is medicine."
The prize, created in 1992, is awarded each year to the best album by an artist from the UK or Ireland.
Albums are nominated based on musical merit, irrespective of how successful the record or act have been in the year.
Along with a trophy, the Mercury Prize winner receives STG25,000 ($A47,728).
The award-winning record was Raye's first to top the UK album charts.
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