According to the Mercer 2011 Quality of Living survey, Vienna beat 220 other cities to earn the distinction.
Zurich, Switzerland, ranked second, followed by Auckland, New Zealand.
Vancouver, Canada (No. 5) topped cities in the Americas; Dubai, United Arab Emirates (No. 74) is ranked the best city in the Middle East and Africa; and Singapore (No. 25) beat all other Asian cities surveyed.
Baghdad ranked last, under Bangui, Central African Republic; N'Djamena, Chad; and Port-au-Prince, Haiti.
Mercer scored the cities based on 39 criteria, including relationships with other countries, traffic congestion, schools, climate, recreational activities, internal stability and economic factors.
More than half of the top 25 cities are in Europe.
"European cities in general continue to have high standards of living because they enjoy advanced and modern city infrastructures combined with high-class medical, recreational and leisure facilities," said Slagin Parakatil, senior researcher at Mercer. "But economic turmoil, high levels of unemployment and lack of confidence in political institutions make their future positions hard to predict."
The three top-ranking U.S. cities are Honolulu (No. 29), San Francisco (No. 30) and Boston (No. 36).
Mercer's survey is intended to help governments and international companies compensate employees working abroad.
The cities were also ranked by personal safety, based on crime, the effectiveness of law enforcement and other factors.
Luxembourg City ranked highest in personal safety. Three cities tied for second place: Bern, Switzerland; Helsinki, Finland; and Zurich.
Baghdad also sits at the bottom of the personal safety list, just under N'Djamena, Chad (No. 220); Abidjan, Cote d'Ivoire (No. 219); and Bangui, Central African Republic (No. 218).
"The top-ranking cities for personal safety and security are in politically stable countries with good international relations and relatively sustainable economic growth," Parakatil said. "Most of the low-scoring cities are in countries with civil unrest, high crime levels and little law enforcement."
No U.S. city made the top 50 list for personal safety.
inb4 eheath "nice copy and paste"