The news sent Twitter shares soaring about 25% in pre-market trading.
The Tesla founder bought 73,486,938 Twitter shares on 14 March, according to the Securities and Exchange Commission.
The stake is worth $2.89bn (£2.20bn), based on Twitter’s closing price on Friday.
The stake makes him one of the largest shareholders in the company and is more than four times the 2.25% holding of Twitter founder Jack Dorsey.
Musk is a regular Twitter user with more than 80 million followers, although recently he said he is giving “serious thought” to building a new social media platform.
Late last month Musk asked his followers whether they thought the social media platform encouraged free speech.
“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”
He then asked: “Is a new platform needed?”
The BBC is not responsible for the content of external sites.View original tweet on Twitter
He regularly uses Twitter to share updates from the companies he owns – including SpaceX and Neuralink. He is also known for sharing memes, adding to his popularity among fans.
But some posts have drawn controversy.
Last year he tweeted in response to a claim, made by the head of the UN World Food Programme (WFP), that just 2% of Mr Musk’s wealth could help to solve world hunger.
In October, Mr Musk said he would sell $6bn in Tesla stock and donate it to the WFP, provided it could describe “exactly how $6bn will solve world hunger”.
Who is Elon Musk? Meet the meme-loving magnate behind SpaceX and Tesla…published in 2021
Mr Musk saw the valuation of his Tesla car company surpass a market value of $1 trillion last autumn, making it the fifth such firm to reach the milestone, after Apple, Microsoft, Amazon and Google-owner Alphabet.
Soon after he took to Twitter to ask users if he should sell a 10% stake in the electric carmaker.
More than 3.5 million Twitter users voted, with nearly 58% voting in favour of the share sale leading to Musk selling around $5bn (£3.7bn) of shares in the firm in November