The band's single, Killing In The Name, sold 500,000 downloads beating X Factor winner Joe McElderry's The Climb by 50,000 copies to clinch the top spot.
Their success followed a Facebook campaign designed to prevent another X Factor number one.
One retailer said it was a "truly remarkable outcome - possibly the greatest chart upset ever".
Speaking on the Radio 1 chart show, Zack de la Rocha from Rage said: "We are very, very ecstatic about being number one." He added it was an "incredible organic grassroots campaign". "It says more about the spontaneous action taken by young people throughout the UK to topple this very sterile pop monopoly," he said.
McElderry, 18, praised the campaign, adding: "It's been exciting to be part of a much-hyped battle and they definitely deserve congratulations."
Thanking all the fans who bought his single, he said: "This time last year I never thought for one minute that I'd win The X Factor, never mind about having a debut single out, so I'm just delighted to be in the charts.
"It's been such an incredible couple of months and I got the best Christmas gift I could ever have asked for in winning The X Factor."
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