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The movie's 25-year-old star, Mikey Madison, was named best actress at the 97th Academy Awards in Los Angeles. The film also won best director for Sean Baker and trophies for original screenplay and editing.
Anora was made for $US6 million ($NZ10.7 million), a tiny sum by Hollywood standards. It emerged as the winner in an unpredictable Oscars race that included papal thriller Conclave, Jewish immigrant story The Brutalist and blockbuster musical Wicked.
"If you're trying to make independent films, please keep doing it. We need more. This is proof," said Baker, a director known for making small films about porn stars, transgender prostitutes and other marginalised people.
Baker had been favoured to win the directing award, having collected top honours from the Directors Guild of America and the Producers Guild of America, and the directing award at the Film Independent Spirit Awards.
He used his acceptance speech to offer his support for the theatrical experience, especially independent theatres, which have been struggling since the Covid-19 pandemic.
"In a time in which the world can feel very divided, this is more important than ever. It's a communal experience, specifically, we don't get at home."
Madison scored an upset over Demi Moore, who had been favoured to win best actress for her role in The Substance.
"I grew up in Los Angeles, but Hollywood always felt so far away from me," Madison said on stage at the Dolby Theatre in Hollywood on Sunday (local time).
"To be here standing in this room today is really incredible."
She said she wanted to "thank and honour the sex worker community. I will continue to be an ally."
Anora, released by independent distributor Neon, has generated $US40 million at global box offices. Wicked, by comparison, has hauled in $US728 million.
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Second Oscar for Brody
Adrien Brody claimed his second Academy Award, winning the best actor trophy for his role as a Jewish immigrant and architect who chases the American dream in The Brutalist.
His new Oscar came two decades after he was named best actor at age 29 for The Pianist.
"Acting is a very fragile profession," Brody said when accepting his award.
"No matter where you are in your career, it can all go away. I think what makes this most special is the awareness of that."
Zoe Saldana won the Oscar for best supporting actress for her role as a Mexico City lawyer and fixer for a former drug lord in the Netflix Spanish language crime drama and musical Emilia Perez.
Speaking through tears, Saldana said her grandmother had come to the United States in 1961 and would be thrilled to see her win for a role in which she sings and speaks in Spanish.
"I am a proud child of immigrant parents with dreams and dignity and hard-working hands."
It was the first Oscar win for the 46-year-old and was preceded by wins at the Golden Globes and BAFTA and SAG awards this year for the same role.
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"I have no idea how I got here," Culkin, who started acting as a child, said on stage at the Dolby Theatre in Hollywood.
"I've been acting all my life. I never felt like this was my trajectory."
Culkin thanked his wife and mother of his two children, Jazz Charton, and said he had recently told her he wanted a total of four kids. Culkin said she joked she would agree if he won an Oscar.
"Let's get cracking on those kids!" he said to his wife from the stage.
Winners of the gold Oscar statuettes are chosen by the roughly 11,000 actors, producers, directors and film craftspeople who make up the Academy of Motion Picture Arts and Sciences.
Best international film
Brazilian drama I'm Still Here, about a matriarch whose husband is taken away by the military regime that ruled the country in the 1970s, won the award for best international feature film.
The film, which also earned nominations for best actress and best picture, tells the true story of Eunice Paiva's struggle to uncover the truth about her husband's forced disappearance in 1971. It was directed by Walter Salles, whose 1998 film Central Station was also nominated for best foreign film, as the category was then known.
The Oscars ceremony coincided with Brazil's Carnival, and as the news of the win spread, the streets erupted in joy. Thousands of revellers, many of whom were holding Oscar statuettes or dressed as Academy Awards nominee Fernanda Torres, celebrated with music, dance, and festivities.
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No Other Land, a film showing the alliance that develops between a Palestinian activist and an Israeli journalist amid their peoples' conflict on the occupied West Bank, won the documentary feature film Oscar.
Accepting the award were the Palestinian Basel Adra, born in 1996, and journalist Yuval Abraham, born in 1995.
The film shows Adra resisting the forced displacement of his people by the Israeli army in the West Bank community of Masafer Yatta. The film shows Israeli soldiers tearing down homes and evicting residents to create a military training zone. Adra befriends Abraham, but their relationship is challenged by the gap in their living conditions.
The adapted screenplay award was given to Conclave - a movie that imagines the secret proceedings to select a new pope.
The prize for best animated feature went to independent film Flow, the first movie from Latvia to win an Oscar.
Nominees Ariana Grande and Cynthia Erivo opened the show with a Wizard of Oz-themed medley including the showstopping hit Defying Gravity from their film Wicked.
On the red carpet, Grande, Saldana, Selena Gomez and other stars wore shiny and sculptural gowns. Chalamet chose a canary yellow tuxedo, prompting a jab from host Conan O'Brien.
"You will not get hit on your bike tonight," O'Brien said.
O'Brien also threatened any winners who spoke too long that he would show their old headshots or cut to a shot of actor John Lithgow "looking slightly disappointed."
Midway through the show, he brought a group of Los Angeles firefighters to the stage and thanked them for their work during the devastating January wildfires.
He also invited them to deliver a few jokes.
"It's great to be back with Conan," said Pasadena Fire Captain Jodi Slicker. "Usually when he calls, he's stuck in a tree."