The UK Independence Party has joined forces with Beppe Grillo's Italian Five Star Movement to form a new grouping in the European Parliament.
The Europe of Freedom and Democracy Group (EFD) will also include MEPs from Lithuania, France, the Czech Republic, Latvia and Sweden among its 48 members.
UKIP topped the polls in UK elections to the European Parliament last month.
Its leader Nigel Farage said the group would push for the "restoration of national democracy" in Europe.
Joining wider political groupings in the Parliament is essential for parties to maximum their influence.
Forming its own group will enable UKIP to get access to significant public funding and will give Mr Farage a guaranteed platform to make speeches in the Parliament.
Under EU rules, each group must have at least 25 MEPs from a minimum of seven member states.
Eurosceptic parties made sweeping gains in last month's elections but UKIP, which now has 24 MEPs, has refused to align itself with a number of them, including France's Front National and Greece's Golden Dawn.
Instead, its closest ally will be the former comedian Beppe Grillo, who took Italian politics by storm when his anti-establishment party took 25% of the vote in last year's general election.
Mr Farage and Mr Grillo met for talks last month.
The Five Star Movement, which had 17 MEPs elected, wants a referendum on Italy's future membership of the euro and a loosening of the fiscal rules applying to countries in the eurozone.
The Swedish Democrats and the Lithuania Order and Justice Party, which have two MEPs each, will also join the grouping, as will the sole representative of the Czech Free Citizens Party.
The group's membership will be completed by Latvian MEP Iveta Grigule, a member of the Union of Greens and Farmers' group and Joelle Bergeron, who quit the Front National two days after being elected last month and who will sit as an independent.
The BBC's Simon Wilson in Brussels said some of Mr Farage's new allies had faced criticism in the past for their far-right views.
Mr Farage said he had overcome political resistance from across Europe to piece together the alliance, which he said he expected to grow in size.
"I am very proud to have formed this group and we undertake to be the peoples' voice," he said.
"We will be at the forefront working for the restoration of freedom, national democracy and prosperity across Europe.
"I am excited about working together with other delegations to be effective in exerting as much change as possible in Brussels while labouring at home to alert people to the harm that EU regulation does to the lives of ordinary people. Expect us to fight the good fight to take back control of our countries' destinies."
Mr Grillo promised the group would make its presence felt in the European Parliament.
"Now we will start working in committees and we will have peoples' voice heard in the European institutions, without intermediaries," he said.
The centre-right European People's Party (EPP) remains the largest grouping in the European Parliament although it saw its representation fall sharply in last month's poll.
The Conservative Party left the EPP in 2009 and set up the rival European Conservatives and Reformists.
This group voted recently to admit Alternative fur Deutschland (AfD), an anti-euro German party into its ranks.