It is one of the most mind-bending sci-fi thrillers of all time but it looks like the mystery surrounding Inception's enigmatic ending may have finally been resolved.

Hollywood director Christopher Nolan has explained the meaning of his 2010 movie's final scene, which shows Leonardo DiCaprio's character Dom Cobb return home to find his children playing happily in the back garden. On a table, Cobb spins his totem – a spinning top (which lets him know if he is in a dream sequence or not) – which rotates and wobbles a little before the film fades to black.

For years, the frustrating conclusion has left many fans wondering if Cobb is still dreaming?

Discussing the film at the Princeton University graduation ceremony, the 44-year-old British film-maker admitted the ambiguous ending is the thing he is most asked about in his whole career and he can understand the frustration.

"I skip out of the back of the theatre before people catch me, and there's a very, very strong reaction from the audience: usually a bit of a groan," he told the assembled crowd.

Inception\'s final shot - so was it a dream or not? Warner Bros

The blockbuster, which starred DiCaprio, Tom Hardy, Ellen Page and Joseph Gordon-Levitt, debuted at number one on its opening weekend and has racked up an impressive $825m (£536m) at the box office worldwide.

According to Nolan, the beauty lies in its uncertainty and the famous ending is one of the reasons the film is a cultural phenomenon. Rather than declare "it was all a dream", he offered a more pragmatic explanation about perception.

"The way the end of that film worked, Leonardo DiCaprio's character Cobb — he was off with his kids, he was in his own subjective reality," Nolan said.

"He didn't really care anymore and that makes a statement: perhaps all levels of reality are valid. The point is, objectively, it matters to the audience in absolute terms: even though when I'm watching, it's fiction, a sort of virtual reality.

"But the question of whether that's a dream or whether it's real is the question I've been asked most about any of the films I've made. It matters to people because that's the point about reality. Reality matters."