While the singer would later call the dress her "biggest fashion moment ever", it was also a turning point for its designer - Donatella Versace.
Three years had passed since the then 45-year-old had taken over the luxury Italian fashion house after the murder of her brother Gianni.
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Few observers had expected her reign to be anything more than a postscript to that of her brother... until that night.
Donatella racked up 27 years at the helm and became an icon in her own right, establishing Versace as a global household name.
And despite having no formal training, she oversaw hundreds of fashion campaigns, as well as designing hotels and dressing some of the world's biggest stars — cementing her status as one of the most successful designers in modern fashion history.
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Versace was worth £1.6billion when it was sold to US firm Capri Holdings in 2018. Donatella was its creative director.
Now she has announced she is to step down, saying it was "the greatest honour of my life to carry on Gianni's legacy". She added: "Versace is always in my heart."
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Dario Vitale, design director of Miu Miu's hugely successful ready-to-wear collection, will succeed her.
The move has led some to claim that Donatella was pushed out amid speculation the Prada Group was interested in buying the brand, and that the decision would prove to be "the downfall of Donatella".
But the 69-year-old cannot be underestimated. She has constantly defied expectations, achieving global success in spite of divorce, grief, drug addiction - and ridicule.
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Born in Reggio Calabria, Italy, in 1955, Donatella's older brother saw her as his muse, dressing her in lavish gowns as a child.
They were inseparable - Gianni even chose the hairdresser who styled her platinum blonde locks when she was 11.
Gianni launched Versace in 1978 and when his sister was 34, he set up a secondary line of his fashion house, just for her.
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But on July 15, 1997, everything changed. At the age of 50, Gianni was shot in the head on the doorstep of his Miami mansion by serial killer and male prostitute Andrew Cunanan.
Upon hearing t...