Veteran musician David Bowie and newcomers Laura Mvula and Jake Bugg are among the nominees for the 2013 Barclaycard Mercury Prize.
The competition, which names the best British and Irish album of the year, includes Arctic Monkeys, Laura Marling, Rudimental, Foals and James Blake.
Completing the list are Disclosure, Jon Hopkins, Savages and Villagers.
The 12 acts will compete for the £20,000 prize, which will be announced on 30 October in London.
Announcing the shortlist at an event in central London on Wednesday, BBC 6 Music DJ Lauren Laverne said: "It's been a great year.
Right now, the single is the dominant format in the music
industry - making the Mercury Prize crucial for those
newer, fringe artists who have no hope of making the
So it's strange that so many of this year's artists are
There are seven former nominees and four number one
albums on the list (five if Arctic Monkeys hit the top slot
this weekend, as expected). Last year, there was one
chart-topper. In 2010, there were none.
But the selection is still surprisingly diverse - from Laura
Marling's naked folk confessionals to the rave-funk of
Resurrected rock colossus David Bowie is the headline
grabber but the Mercury panel traditionally prefer debut
albums to grand dames - five of the last seven
winners were first-timers.
The smart money is on dance duo Disclosure. Music fans
would do well to check out all of the nominees.
"It's always a challenging task to decide a shortlist of just 12 releases and that has been made all the more difficult by the sheer volume and quality of music that's been released."
The shortlist was chosen from an entry of over 220 albums. Five of the nominated albums are debut releases, while seven of the artists have been nominated before.
Bookmakers William Hill have installed Bowie as the favourite alongside the Arctic Monkeys album AM.
Released this week, AM follows the Sheffield four-piece's second headline slot at Glastonbury in June.
Drummer Matt Helders, described it as "the album we've always been waiting to make".
The group said they were "delighted and hugely flattered" by the nomination.
Bowie, aged 66 years, eight months and 3 days, is the Mercury Prize's oldest nominee, beating renowned jazz pianist Stan Tracey by a month.
The singer broke a 10-year silence in the early hours of 6 January, releasing a new single.
Where We Are Now was the first sign of his 24th studio album, The Next Day, recorded in secret over two years with long-time producer Tony Visconti.
The album casts an eye back over Bowie's illustrious career and sees him face up to his own mortality.
Last year, indie rock band and early favourites Alt-J picked up the prestigious accolade for their debut album An Awesome Wave.
BBC sound of nominee Laura Mvula is among five debut artists nominated, for the critically acclaimed Sing To The Moon.
Others include 19-year-old singer Bugg, dance duo Disclosure, made up of brothers Howard and Guy Lawrence, electronic quartet Rudimental and the four-piece female post-punk guitar band, Savages.
Nominee Jon Hopkins, who has collaborated with Brian Eno and Coldplay, gets his second Mercury nod, this time for his album Immunity, released in June.
Last year's winners were Leeds indie band Alt-J
He said: "I am a bit stunned to have been nominated this year. For an album of not exactly hummable electronic music to get such an accolade is amazing and a total surprise."
Simon Frith, chair of the judging panel, described the list as a celebration of "a fascinating year for British and Irish music, marked by a wonderful range of musical voices - urgent, reflective, upbeat, and tender, acoustic and electronic and all with something unique to say".
A number of heavily tipped records failed to make the list, including London Grammar's If You Wait and Bad Blood from four-piece Bastille.
Channel 4 will broadcast the ceremony, featuring live performances from each of the nominees, from its new home at the Roundhouse in Camden, north London, on 30 October.
The four-year agreement with the broadcaster also includes a series of intimate Album of the Year Live gigs around London from the 12 shortlisted acts.