It was captured blasting through the upper levels of the atmosphere at 2pm yesterday afternoon, leaving an iridescent trail in its wake.
Astonished residents watched as the impressive natural phenomena eventually disappeared over the horizon.
Experts believe it may have caused forest fires in the south of the city, which have been ravaged by drought.
Local officials and the National Police are currently trying to determine where the meteorite may have landed and are speaking to farmers south of the city.
The meteorite fell in the south of the Imperial City, between the districts of San Sebastian and San Geronimo.
Cusco is the gateway to the Inca citadel of Machu Picchu. The Inca trail attracts tens of thousands of tourists every year, with entry restricted to 200 new travelers each day.
Peru last saw a meteorite fall in September 2007 near the border with Bolivia.
© UnknownBlazing fury: The meteorite was broadcast on local TV just hours after it flew across Cusco in Peru yesterday
It was dated as about 4.5 billion years old and formed around the same time as our Solar System.
Meteorites are fragments of rock and sometimes metal that survive the fall to Earth from space. Most are fragments left over from the collision of two asteroids.
Captured by Earth's gravitational force, they are accelerated to speeds of over 11.2 kilometres per second.
They can vary in size from a fraction of a millimetre to larger than a football pitch. It is believed a meteorite six miles across wiped out the dinosaurs 65million years ago.
Hundreds of meteorites fall to Earth each year but only a handful are recovered.
© UnknownThe meteorite was spotted in the Andean city of Cusco, home of the Inca citadel Machu Picchu
It's trajectory over the sky progressed a lot slower than a meteorite usually would - could it be an ordinary airplane with condence stripes showing?