That's according to automotive data intelligence provider JATO Dynamics.
Ford last year sold 953,174 cars in the 30 European markets monitored by JATO, including 306,405 Fiestas.
Ford recently announced that during 2012 more than 1.4m Ford vehicles were sold across all of the 51 European markets in which it operates.
The Fiesta was also the best-selling B-car (sub-compact) globally for the first nine months of 2012, with more than 560,000 Fiestas sold worldwide, according to the latest Polk new vehicle registration data.
"The Fiesta had a fantastic 2012, both in Europe and across the world," said Roelant de Waard, Vice President, Marketing, Sales and Service, Ford of Europe.
"This iconic car has come to define what customers desire from a small car: style, quality, efficiency and great technology."
Ford has sold more than 15m Fiestas worldwide since the vehicle first went into production in 1976.
The Fiesta now has been the top-selling small car in Europe for three out of the past four years.
During that period, more than 1.7m Fiestas have been sold in Europe and 2.1m globally.