Cyrus, 20, carried a Chanel clutch purse with her on the stage to collect the prize for Best Video for her song "Wrecking Ball" Sunday night.
She joked that the award wouldn't fit in the tiny bag, but it was big enough to hold something else.
The former Disney Channel star then pulled out what appeared to be a joint, which she lit and inhaled.
The moment was censored when the EMAs ceremony was rebroadcast on U.S. television because marijuana use is not legal in the United States as it is in the Netherlands, according to UsMagazine.com.
"No one was expecting it to happen," a show source told the magazine. "It was so brazen, so shameless. It was so uncalled-for."