Daniel Day-Lewis has made Oscars history by becoming the first person to win the best actor prize three times.
The British-born star, who had been the runaway favourite, was rewarded for his role in Steven Spielberg's Lincoln.
"I really don't know how any of this happened. I do know I've received much more than my fair share of good fortune in my life," he said.
Ben Affleck's Iran-set rescue thriller Argo beat Lincoln to the top prize for best picture.
In a live broadcast from the White House, First Lady Michelle Obama joined Jack Nicholson to help present the best picture prize at the end of the night.
Argo is the first best picture winner not to have a concurrent nomination for best director since 1989's Driving Miss Daisy.
But despite Affleck's omission from the best director category, the film had been widely-tipped to take the top prize.
Oscars host Seth MacFarlane joked at the start of the ceremony: "Argo's story is so top-secret that its director remains unknown to the Academy."
Accepting his award alongside fellow producers George Clooney and Grant Heslov, Affleck paid tribute to the "genius" Steven Spielberg who lost out in the same category.
Referring to his previous Oscar success with 1997's Good Will Hunting, he said: "I never thought I would be back here and I am because of so many of you who are here tonight".He added: "It doesn't matter how you get knocked down in life, all that matters is that you get up."
The Oscar victory for Daniel Day-Lewis puts him ahead of Hollywood legends Jack Nicholson, Marlon Brando, Dustin Hoffman and Tom Hanks - who all have two best actor wins to their name.
Day-Lewis, who holds UK-Irish citizenship, previously won for My Left Foot (in 1990) and There Will Be Blood (2008) and has a reputation for immersing himself in his roles.
Jennifer Lawrence won the Oscar for best actress for her role as a troubled young widow in Silver Linings Playbook. The 22-year-old actress, who stumbled over her dress on her way to the stage, joked: "You guys are just standing up because you feel bad that I fell over and that's embarrassing."Surveying the huge audience in Hollywood's Dolby Theatre, she added: "This is nuts." It was the first Oscar win for Lawrence, who was previously nominated for best actress in 2011 for her performance in Winter's Bone.
Anne Hathaway won the Oscar for best supporting actress for her role as tragic factory worker Fantine in movie musical Les Miserables.
With her cropped hair and gaunt face, Hathaway's teary version of I Dreamed a Dream had made her an Oscar favourite. "It came true," the actress said when she collected her statuette.Hathaway's Oscar was her first, the actress having been previously nominated in 2008 for Rachel Getting Married.
Hathaway said: "Here's hoping that someday in the not too distant future, the misfortunes of Fantine will only be found in stories and not in real life."
British singer Adele won the Oscar for best original song for her Bond theme Skyfall, which she also performed during the show.
She struggled through tears to thank the Bond producers and her co-writer Paul Epworth, who collected the award alongside her.
Ang Lee won his second Oscar for directing Life of Pi, the adaption of Yann Martel's fantasy novel about a boy stranded in a lifeboat with a Bengal tiger. The film won four Oscars in total, more than any other film.
The Taiwanese-born director, who won previously for Brokeback Mountain (2006), exclaimed: "Thank you, movie god!"
Life of Pi picked up two Oscars in the early stages of the awards for cinematography and visual effects.
Cinematographer Claudio Miranda admitted in an emotional acceptance speech: "This movie was quite a beast to make." Later, Mychael Danna picked up the statuette for Life of Pi's original score.
Christoph Waltz won his second Oscar for best supporting actor in a Quentin Tarantino film, this time as a German bounty hunter in the slave revenge story Django Unchained.
Picking up the first award of the night, Waltz offered thanks to his character Dr King Schultz and to "his creator and the creator of his awe-inspiring world, Quentin Tarantino."
The Austrian actor won his first Oscar as a Nazi colonel in Tarantino's Inglourious Basterds in 2010.
Tarantino won the original screenplay prize for Django Unchained, adding to the Oscar he won for writing Pulp Fiction in 1994. "I have to cast the right people to make those characters come alive and boy this time did I do it," he said.
The best adapted screenplay Oscar went to Chris Terrio for Ben Affleck's Iran-set siege thriller Argo.
The best short animated film category was won by Paperman, while Pixar's Scottish adventure Brave won best animated feature.
The award for costume design went to Briton Jacqueline Durran for Anna Karenina. She described the win as "completely overwhelming" and paid tribute to her children who were "fast asleep in England".
The make-up and hairstyling award went to fellow Brits Lisa Westcott and Julie Dartnell for Les Miserables. Tom Hooper's musical also picked up the Oscar for sound mixing.
Unusually, there was a tie in the sound editing category - the Oscar was shared by Zero Dark Thirty and Skyfall.
Searching for Sugar Man, which tells the story of musician Rodriguez who disappeared from public view in the early 1970s but developed a cult following in South Africa, won the Oscar for best documentary.
Producer Simon Chinn said: "Rodriguez isn't here tonight because he didn't want to take any of the credit himself."
Austrian drama Amour won the Oscar for best foreign language film.
The French-language film, directed by Michael Haneke, portrays the indignities of an elderly Parisian couple - Anne and Georges - as they cope with Anne's wish to die after a stroke.
Host Seth MacFarlane kicked off the ceremony at the Dolby Theatre in Los Angeles with the quip: "I honestly cannot believe I'm here. It's an honour that everyone else said 'no'".After an exchange with William Shatner, who appeared as Star Trek's Captain Kirk, the Family Guy creator launched into a satirical song about topless appearances by actresses in the movies.
Almost an hour into the three-and-a-half hour show, Halle Berry introduced a tribute to the James Bond franchise, followed by Dame Shirley Bassey who sang her theme song to the 1960s Bond classic Goldfinger.
The show also featured a salute to movie musicals of the past decade, with Chicago Oscar-winner Catherine Zeta-Jones and Dreamgirls winner Jennifer Hudson joining Les Miserables cast members that included Hugh Jackman, Anne Hathaway, Russell Crowe, Helena Bonham Carter and Amanda Seyfried.
During the section of the show that pays tribute to those who died in 2012, Barbra Streisand sang the late Marvin Hamlisch's The Way We Were, from the 1973 romantic drama in which she starred with Robert Redford. It was Streisand's first Oscars performance for 36 years.
