Crash, a drama about race relations in Los Angeles, has won the Oscar for best film over favourite Brokeback Mountain.
Ang Lee won the Oscar for best director for his film depicting a romance between two cowboys whose love for each other spans decades.
Philip Seymour Hoffman won the Oscar for best actor as Hollywood showed its political colours on Sunday by awarding George Clooney and Rachel Weisz supporting acting honours for two message movies.
Hoffman won for Capote, in which he plays writer Truman Capote doing a deal with the devil to get an ending for his classic work In Cold Blood.
Reese Witherspoon won the best actress Oscar for her portrayal of June Carter, a country singer and partner of Johnny Cash, in Walk the Line.
Academy voters named South Africa's Tsotsi as best foreign film.
Clooney was named best supporting actor in a film for his portrayal of a world-weary CIA agent in oil drama Syriana, and British actress Weisz was given the best supporting actress award for playing a social activist who is murdered for her beliefs in the thriller The Constant Gardener.
March of the Penguins won the
Oscar for best documentary
In early awards, Wallace & Gromit in the Curse of the Were-Rabbit was named best animated feature film, and box office smash March of the Penguins won best documentary. Luc Jacquet, the film's director, and his team later posed clutching cuddly toy penguins.
A range of films won other trophies. Japanese saga Memoirs of a Geisha was given two Oscars for costume design and art direction.
The Chronicles of Narnia: The Lion, The Witch, and the Wardrobe won for best makeup.
It's Hard Out Here for a Pimp from Hustle & Flow was named best original song, and Brokeback Mountain took home the Oscar for best original score.
Clooney, who had been nominated for three Oscars overall, said as he accepted his award: "We are a little bit out of touch in Hollywood. I think that's probably a good thing. We are the ones who talked about Aids when it was only being whispered ... We talked about civil rights ... I'm proud to be part of this academy, proud to be part of this community, proud to be 'out of touch'."
Reese Witherspoon sang on the
soundtrack of Walk the Line
Weisz said Constant Gardener, which tells of unethical testing by drug companies in Africa, said her film, "really paid tribute to the people who are willing to risk their own lives to fight injustice, they are greater men and women than I".
Jon Stewart, a comedian known for political satire who hosted the show, began by sticking to what he does best - poking fun at politicians and Hollywood stars.
He reminded audiences of the swan dress that Bjork, the Icelandic pop singer, wore to the Oscars several years ago and became a major fashion faux pas. Stewart said that this year when Bjork was trying on her dress, "Dick Cheney shot her".
Stewart and his joke writers fashioned a series of fake advertisements that mimicked political campaigns in endorsements of one actress nominee over another - a
Charlize Theron favoured over a Keira Knightley, for instance.
The academy gave an honorary award to director Robert Altman, whose movies such as M*A*S*H and Nashville have challenged issues of their day.
Gavin Hood poses with his best
foreign film Oscar for Tsotsi
Stewart also noted the many movies with gay subjects and characters nominated this year including romance Brokeback Mountain and Capote, about Truman Capote, the homosexual author.
"'Capote showed America that not all gay people are virile cowboys - some are actually effete New York intellectuals," he said.