The festival, which runs until June 4, was officially launched by Pulitzer Prize-winning writer Frank McCourt yesterday.
The event this year hosts nationally and internationally acclaimed writers such as Nobel laureate JM Coetzee, Clive James and John Banville.
Mr McCourt will deliver the Irish Examiner reading for 2006 at Listowel this Friday.
Mr Barry’s winning novel, about the Irish experience in World War I, was previously shortlisted for the Man Booker Prize but was beaten by John Banville’s novel The Sea.
However, Mr Barry’s book has won out this time against four other titles, including Mr Banville’s Booker winner.
The other shortlisted books were The Family on Paradise Pier by Dermot Bolger, Grace and Truth by Jennifer Johnston along with Utterly Monkey by Nick Laird.
Previous winners of the Kerry Group Fiction award included Neil Jordan and Gerard Donovan.
Presenting the prize, Mr Frank Hayes, director of corporate affairs at the Kerry Group, congratulated Mr Barry and noted the strong state of Irish fiction today.
Mr Barry had beaten other “extraordinary novels on this year’s shortlist”, Mr Hayes said.
Tickets are still available for all the readings at Listowel Writers’ Week, as tickets are sold on the door before each event.
More information is available from 068 21074, or see www.writersweek.ie.