The Lord of The Rings: The Return of the King has won 11 prizes out of a possible 11 at the Academy Awards.
The Lord of the Rings director Peter Jackson praised his cast
The final part of the Tolkien trilogy achieved a clean sweep, including best picture and director for Peter Jackson.
It became the first fantasy film to win best picture - and equalled the record trophy tally at the Hollywood ceremony.
Sean Penn won best actor for his role in Mystic River, with Charlize Theron named best actress for her part as a serial killer in Monster.
Renee Zellweger and Tim Robbins won acting prizes for supporting roles for Cold Mountain and Mystic River.
The Return of the King's haul of 11 statuettes equalled the totals won by Ben Hur in 1960 and Titanic in 1998. But those two films did not win every award they were nominated for.
The Return of the King also scooped best score, song, film editing, make-up and costume design.
Renee Zellweger had been nominated for three years in a row
Its tally was completed by prizes for best adapted screenplay, art direction, visual effects and sound mixing.
Accepting the best picture award, Jackson described the achievement as "unbelievable".
"I'm so honoured that the Academy and its members have seen past the trolls and the wizards and the hobbits and are recognising fantasy this year," he said.
He earlier praised his "wonderful cast" and described it as an "incredibly overwhelming night".
The awards signalled Hollywood's desire to reward Jackson and his team for making three ground-breaking and hugely popular movies.
The two previous Lord of the Rings films had limited Oscars success - picking up six prizes in minor categories out of 19 nominations between them.
But the trilogy has had tremendous box office success. The Return of the King has become the second most popular movie of all time, taking more than $1bn (£534m) at global box offices.
Tim Robbins did not deliver a political speech, as some expected
Few had dared to predict a clean sweep - but there were no other big surprises on the night.
Mystic River and Master and Commander won two awards each while Lost in Translation and Cold Mountain won one Oscar each.
All four victorious actors had been hot favourites in their categories. Nevertheless, Theron and Zellweger gave highly emotional acceptance speeches.
Theron, who won for her role as a serial killer in Monster, said it had been "such an incredible year".
Her voice faltered as she thanked her mother. "You have sacrificed so much for me to be able to live here and make my dreams come true," the South African star said.
And Zellweger, who starred in Cold Mountain, said she was "overwhelmed" and thanked her "immigrant mom and dad" for "never saying 'don't try'".
Penn and Robbins both won for their roles in Clint Eastwood's thriller Mystic River - providing the film's only awards of the night.
Penn touched on politics in his speech, saying: "If there's one thing actors know - other than that there aren't any WMDs - it's that there is no such thing as 'best' in acting."
But Robbins did not get political, telling the audience: "This is really a lovely honour. I'd like to thank my fellow nominees, who were all spectacular."
Master and Commander won for best sound editing and best cinematography.
Sofia Coppola picked up the award for best original screenplay for her film Lost In Translation, while Finding Nemo won best animated feature, as widely expected.
The Fog of War was named best documentary feature - and producer Errol Morris gave the night's most overtly political speech.
He said: "40 years ago this country went down a rabbit hole in Vietnam and millions died - I fear we're going down a rabbit hole once again."
Charlize Theron received her award - and a kiss - from Adrien Brody
And French-Canadian comedy drama The Barbarian Invasions was named best foreign language film.
Security was tight for the ceremony - but glitz and humour returned after last year's ceremony was overshadowed by war.
The ceremony was hosted by comedian Billy Crystal, who has compèred the ceremony seven times before.
"For the very first time, we're being simulcast in Aramaic," he joked, referring to the ancient language used in Mel Gibson's film The Passion of the Christ.
There were also tributes to Bob Hope and Katharine Hepburn - who both died during the last 12 months.