High-contrast coronagraphy will be needed to image and characterize faint extra-solar planetary systems. Coronagraphy is a rapidly evolving field, and many enhanced alternatives to the classical Lyot coronagraph have been proposed in the past ten years. Here, we discuss the operation of the vector vortex coronagraph, which is one of the most efficient possible coronagraphs. We first present recent laboratory results, and then first light observations at the Palomar observatory. Our near-infrared H-band (centered at ~ 1.65 microns) and K-band (centered at ~ 2.2 microns) vector vortex devices demonstrated excellent contrast results in the lab, down to ~ 1e-6 at an angular separation of 3 lb/d. On sky, we detected a brown dwarf companion 3000 times fainter than its host star (HR 7672) in the Ks band (centered at ~2.15 microns), at an angular separation of ~ 2.5 lb/d. Current and next-generation high-contrast instruments can directly benefit from the demonstrated capabilities of such a vector vortex: simplicity, small inner working angle, high optical throughput (>90%), and maximal off-axis discovery space.