And the winner is, as expected, Jared Leto.
This is Leto's first Oscar. In the film, Leto plays a transgender AIDS patient in Texas who teams up with a homophobic rodeo cowboy to import medication from Mexico to the US. Leto also won a Golden Globe for his performance.
01:40 GMT - Opening - Ellen DeGeneres brings out a set of excellent one-liners to start the show. She finishes her monologue saying, "Possibility number one -- '12 years a slave' wins best picture. Possibility number two -- you're all racists."
hl2:The show begins
01:29 GMT - The show is about to start - Five minutes to go and the stars are taking their seats - Brad Pitt and Angelina Jolie are at the front along with Cate Blanchett, Sally Hawkins, Bruce Dern and his date, daughter Laura.
Kevin Spacey, asked what's so special about tonight, says it's a chance for people in the business to come together and celebrate the work they do all year long, which isn't glamorous," he adds. "We don't get dressed up like this."
01:25 GMT - Sandra Bullock on making 'Gravity' - Sandra Bullock, best actress nominee for "Gravity", is grilled about her dress (Alexander McQueen) and how making the 3D space thriller changed her. "Well, that's hard to do in a soundbite," the 49-year-old replies, adding that the person who went into the production was not the same person that came out.
"My moments with Alfonso (Cuaron) (brought) up a lot of emotional stuff," adds Bullock, who won a best actress Oscar for "The Blind Side" as her marriage was imploding. She said her "experience at work, helped sort out a lot of life stuff."
Although it didn't solve everything. "I'm still problematic," Bullock says. "Just not as problematic as I used to be."
01:14 GMT - 'People in glass houses...' - Jimmy Kimmel turns up, in a shirt and jeans, to plug his post-Oscars show while chatting to Lara Spencer.
In a skit, he climbs into the living room of a couple of scruffy couch bloggers, live-tweeting snarky comments from their sofa in sweats and underwear. Kimmel chides them for their snarky remarks. "People in glass houses..." he says. Pretty funny.
01:09 GMT - Best supporting actor nominees - Bradley Cooper, best supporting actor nominee for "American Hustle", gets the crowd roaring as he shares a joke with Jonah Hill, with whom he's competing for the award.
Meanwhile another competitor in the category, Barkhad Abdi, the former Minneapolis limo driver who earned an Oscar nomination for his first acting role, is asked what it feels like to be driven in a limousine to the ceremony. "Well, I'm feeling great, just happy to be here. It's a dream come true."
01:02 GMT - Jared Leto with his family - Jared Leto is "sharing it (the Oscars) with the family", he tells ABC, attending the awards with his mother and brother.
The 42-year-old star, front-runner for the best actor award, says he feels "really lucky to have been a part of" the film "Dallas Buyers Club", in which he plays transsexual AIDS sufferer Rayon.
"It's been six years since I made a movie so to return with this, with so much love and support in an independent film that was barely made, is a dream."
00:56 GMT - Lupita Nyong'o stuns in Prada - Lupita Nyong'o, best supporting actress nominee, is drawing some appreciative gasps as she wends her way down the red carpet. The 31-year-old newcomer, who is fast becoming a style icon after an awards season of stunning outfits, wins again in a custom-made Prada light blue silk gown with a plunging neckline and flowing skirt. In an interview, she said the blue of her gown reminded her of Nairobi, "so I wanted to have a little bit of home."
00:46 GMT - Jennifer Lawrence falls, again - Uh oh - Jennifer Lawrence is in danger of making the Oscar tumble her signature move.
The best supporting actress nominee slipped on the red carpet on the way to the Dolby Theatre and had to be caught by those around her. Last year the unstoppable star tripped on her way up the steps to the stage to collect her best actress Oscar for "Silver Linings Playbook" and before this year's ceremony she said in an interview she didn't want to trip again so would chose a gown that was "more accessible for stairs". Oops.
00:29 GMT - One hour to showtime - The accountants from Price Waterhouse Coopers have arrived with the results of the Oscar ballots in locked briefcases. The pair have known the results since calculating them on Friday but shared the intelligence with no-one. But there's only an hour to go until the first awards are announced.
00:22 GMT - Amy Adams in Gucci - Amy Adams admits she put her red hair up in a chic bun because of the rain. "I have a lot of hair so, play it safe."
The star, the only best actress nominee who hasn't previously won an Oscar, shows off her Tiffany jewels and Gucci Couture sheath dress and tells Robin Roberts her up-do was inspired by Kim Novak, who is presenting at the ceremony. This is my "Vertigo homage", she says.
00:06 GMT - Stars arrive on the red carpet - The stars have begun arriving on the giant red carpet outside Hollywood's Dolby Theatre. Amy Adams, best actress nominee, is making her way down in a gorgeous, glove-like navy strapless sheath dress.
Meanwhile Philomena Lee, whose real life story was the inspiration for best film contender "Philomena", is on the red carpet with her daughter. They tell KTLA interviewers they didn't take comedian Steve Coogan seriously when he first approached them with the idea of the film but were soon won over. Lee, who is played by best actress nominee Judi Dench in the film, describes being at the Oscars as "the highlight of my whole life".
Best actor contender Bruce Dern, 77, nominated for "Nebraska", arrives with his daughter, Laura Dern. The actress gushes about her father's many qualities including the fact "he demands the truth from everyone around him". Dern is equally full of praise for his daughter, who was nominated for a best actress Oscar in 1992 for "Rambilng Rose". This is the second Oscar nomination for Dern Sr, who was last nominated in 1979 for best supporting actor for "Coming Home".
Those keen to see the return of the Jared Leto 'man bun' are disappointed to see the best supporting actor's locks flowing freely down his back. The 42-year-old frontrunner, who has been cleaning up at the precursor awards, is almost certain to take the stage again tonight. It's a far cry from "My So-Called Life".
00:00 GMT - Welcome to AFP's live report - The 86th Academy Awards is one of the most exciting in years, a race packed with critically acclaimed contenders that has left some of the top categories still impossible to call.
The unusually suspenseful contest has made for some aggressive, down-to-the-wire campaigning as Hollywood titans and red carpet regulars vie with breakout stars for gold.
Best picture appears a three-way race between harrowing period epic "12 Years a Slave" (9 nominations) and top-nominated contenders 3D space blockbuster "Gravity" and comic drama "American Hustle" (both with 10 nominations).
Top acting honors, however, are likely to go to other films. Cate Blanchett ("Blue Jasmine") has an apparent lock on best actress while Matthew McConaughey ("Dallas Buyers Club") seems set to collect his first Oscar, unless "12 Years" star Chiwetel Ejiofor or Leonardo DiCaprio ("The Wolf of Wall Street") can pip the former rom com beefcake to the best actor prize.
History could be made if Steve McQueen wins best director for "12 Years" and becomes the first black director to do so. And Jennifer Lawrence could become the youngest actress with two Oscars if she beats rival Lupito Nyong'o ("12 Years") in the best supporting actress category.
On stage, expect plenty of music as all four best song contenders perform - will Pharrell Williams manage to leave his giant Vivienne Westwood hat at home? Meanwhile Ellen DeGeneres is back for her second hosting gig, a bid to return to safer waters after last year's controversial turn by Seth MacFarlane, whose abrasive routine raised as many hackles as laughs. Can the 56-year-old showbiz veteran keep the viewers laughing? Let's go the Dolby Theatre to find out.