We present a comprehensive study of B^{0}→ωω decays using 772×10^{6} BB[over ¯] pairs collected with the Belle detector at the KEKB e^{+}e^{-} collider. This process is a suppressed charmless decay into two vector mesons and can exhibit interesting polarization and CP violation. The decay is observed for the first time with a significance of 7.9 standard deviations. We measure a branching fraction B=(1.53±0.29±0.17)×10^{-6}, a fraction of longitudinal polarization f_{L}=0.87±0.13±0.13, and a time-integrated CP asymmetry A_{CP}=-0.44±0.43±0.11, where the first uncertainties listed are statistical and the second are systematic. This is the first observation of B^{0}→ωω and the first measurements of f_{L} and A_{CP} for this decay.