The song, first posted on YouTube on July 15, clocked the 1 billion milestone at 3.50am (NZT) and YouTube marked the occasion with a dancing Psy doodle next to their logo.
The song also became YouTube's most watched video last month, overtaking Justin Bieber's "Baby" video, which previously held the title.
"I didn't even imagine 'Gangnam Style' would get 1 million views, let alone 1 billion views! Is this the Tru-PSY show?" the rapper said in a statement.
This has been a whirlwind year for rapper Psy, 34, who is the first Korean pop (or K-pop) artist to achieve mainstream success in the U.S. after "Gangnam Style," named after the affluent Gangnam District in Seoul, captured viewers' attention.
The rapper recently performed for President Barack Obama, met with U.N. Secretary-General Ban Ki-moon and won the best video award at the MTV Europe Music Awards in November.
The video shows the outlandishly dressed Psy rap in Korean while performing an invisible horse-riding dance, which has become a pop culture trend, spurring many copycat and parody videos.
The popularity of the song has sparked growing international interest in Asian pop music, throwing a spotlight on the K-pop industry, which now aims to follow Psy into mainstream Western pop music.
