Halle Berry won Best Actress, for her work in "Monster's Ball," becoming the first African-American woman ever to win that honor.
Denzel Washington won Best Actor, for his performance against type, as a crooked cop in "Training Day." He was only the second black to win the award, following Sidney Poitier, who was given a special Oscar Sunday night.
"I'll always be chasing you, Sidney," Washington said. "I'll always be following in your footsteps. There's nothing I would rather do. God bless you."
"A Beautiful Mind" won Best Picture and for former child actor Ron Howard, Best Director.
Although Berry was favored to win, she was stunned when her name was read out - and for nearly a minute, sobbed with emotion.
"This moment is so much bigger than me," said Berry, holding her statue. "This is for Dorothy Dandrige, Lena Horne, and Diahann Carroll...for every faceless woman of color that now has a chance because this door has been opened."
With four Oscars, "A Beautiful Mind" dominated the main categories, with Jennifer Connelly accepting the supporting-actress trophy and Akiva Goldsman the award for adapted screenplay.
Also with four Oscars was the fantasy epic "The Lord of the Rings: The Fellowship of the Ring," which had led with 13 nominations. It won for best score, cinematography, visual effects and makeup.
Howard Shore picked up the statuette for the "Rings" score, even though the show's conductor, John Williams, had been nominated for two films.
Randy Newman won Best Original Song, for "If I Didn't Have You," from "Monsters, Inc." The win came on what was his 16th Oscar nomination, and was his first.
The songwriter, who has groused about previous losses, was nonetheless ready to claim his gold and sprung onto stage right on time to take his long-awaited bow, beating out nominees Paul McCartney, Sting, Enya, Nicky Ryan, Roma Ryan and Diane Warren.
"Gosford Park" grabbed the honors for Best Original Screenplay.
In a major surprise to some Oscar-watchers, veteran British actor Jim Broadbent was named Best Supporting Actor for his role as the caring husband of novelist Iris Murdoch who falls victim to Alzheimer's Disease in "Iris."
Most experts thought that Sir Ian McKellen would win the award for his work as the wizard Gandalf in "Lord of the Rings."
At four hours, 23 minutes, it was the longest Oscar show ever, topping the previous record-holder two years ago by 14 minutes.
"Shrek," the hip twist on cartoon fairy tales that featured the voices of Mike Myers, Eddie Murphy and Cameron Diaz, won the first-ever Oscar for animated feature film.
In other awards, "Rings" won Oscars for visual effects, cinematography and make-up.
"Moulin Rouge" won for art direction and costume design. "Black Hawk Down" took Oscars for sound and film editing.
The surprise foreign film award winner was Bosnia's "No Man's Land," writer-director Danis Tanovic's satiric story of a Bosnian soldier and a Serbian soldier stuck together in a trench. France's "Amelie," which had five nominations, was expected to win.
"A Beautiful Mind" had been the subject of a whispering campaign going into the Oscars with claims that its makers covered up Nash's alleged homosexuality and anti-Semitism. Nash denied both in an unusual pre-Oscar interview with CBS program "60 Minutes."
Oscars host Whoopi Goldberg took almost immediate notice of the controversy. "So much mud has been thrown this year all the nominees were black," she said. Goldberg joked she had even received an e-mail suggesting Frodo Baggins, the hobbit hero of "Lord of the Rings: Fellowship of the Ring," was an anti-Semite.
The answer to the night's big non-award question was: Best Actress nominee Nicole Kidman brought her sister and not a date. Many Hollywood wags had wondered if she would show up with one to mark herself as an independent woman after her divorce from Tom Cruise.
As for Cruise, he opened the Oscars with a short speech that asked a simple question: should Hollywood celebrate the Oscars in the wake of the Sept. 11 suicide hijack attacks.
Cruise said Sept. 11 was an event that "would change us" and he asked, "Should we celebrate the joy and magic that movies bring" and then added, "Dare I say it? More than ever."
Near the end of the ceremony, two-time Oscar winner Kevin Spacey came onstage to introduce the traditional montage of tribute to stars who have died in the past year. This year's tribute included Jack Lemmon and George Harrison but before the big names rolled, Spacey called on everyone in the auditorium to stand for a moment of silence "who every single American hero who gave his or her life on September 11."
"We must celebrate life," said Spacey, saying that movies do that, by freezing "life in its finest hours - in laughter and in sorrow."
Woody Allen received a standing ovation before introducing a film tribute to New York City, a gesture made to show support from the movie community following the attack that destroyed the city's World Trade Center.
"For New York City I would do anything...it is a great, great movie town," Allen, who normally shuns such star studded events, said.
Viewers were treated to a standup routine by the past Oscar winner, something he he hasn't done since his transition from television comedy writer to movie actor-writer-director.
Allen joked that when the academy called to invite him, he thought officials wanted his Oscars back. "I panicked because the pawnshop has been out of business for ages. I had no way of retrieving anything," Allen said.
This year's Awards were the first time that the ceremony has been held in the heart of Hollywood in 42 years - the last time being 1960 - when John F. Kennedy was just a presidential candidate and Burt Lancaster won best actor for "Elmer Gantry," a tame film by the standards of 2002.
Air traffic was banned over Hollywood and concrete barriers lined the entryway to the Kodak Theatre. Police bomb squads and hazardous materials teams were also on hand to respond to any threats, but things went forward with no apparent problems.