The auditing firm that supervises the Oscar ballots has apologised for the error which led to the wrong film being named as Best Picture.
Oscar officials were investigating the mix-up which eventually went to Moonlight, directed by Barry Jenkins, a drama about a gay black youth coming to terms with his sexuality in an impoverished Miami neighbourhood.
Award presenters Warren Beatty and Faye Dunaway at first said the winner was romantic musical La La Land.
PricewaterhouseCoopers, which oversees the ballots, confirmed the error and apologized.
"We are currently investigating how this could have happened, and deeply regret that this occurred," the firm said in a statement.
Officials from the Academy of Motion Picture Arts and Sciences were not available to comment.
Other mixups and mistakes
While the Best Picture mix-up took top spot in the evening's embarrassments, the ceremony was beset with smaller blunders.
During the 'in memoriam' segment, the name of celebrated Australian costume designer Janet Patterson, who died last year, was accompanied by a photo of Jan Chapman, an Australian movie producer who is alive and well.
The 16-year-old actress and lead voice in Disney's animated film Moana, Auli'i Cravalho, was struck on the head with a flag waved by a backup dancer while performing the best song-nominated, 'How Far I'll Go'.
The best picture mistake during Hollywood's biggest night seemed to eclipse the prior three hours of a show peppered with jokes about US President Donald Trump.
The gibes capped an awards season marked by celebrities' fiery protests of Trump's policies.
Oscars host Jimmy Kimmel fired off political zingers and even tweeted at the Republican president, getting no immediate response.
Several celebrities wore blue ribbons in support of the American Civil Liberties Union advocacy group, which worked to get Trump's bid to ban travelers from seven majority Muslim nations blocked in US courts.
But for the most part, the speeches were mild or made general pleas for tolerance rather than direct attacks on Trump.