This year, the 60-year-old actor had also won a Golden Globe, a BAFTA and Screen Actors Guild Awards for her role in Martin McDonagh's film.
Jennifer Lawrence and Jodie Foster presented the Best Actress trophy to McDormand, in a break from tradition where the previous year's Best Actor winner presents the award.
"So I'm hyperventilating a little bit," McDormand joked as she began her acceptance speech.
She then asked "all the female nominees in every category" to stand with her in the room with a special shout-out to fellow nominee Meryl Streep.
"Okay, look around everybody. Look around, ladies and gentlemen, because we all have stories to tell and projects we need financed. Don't talk to us about it at the parties tonight. Invite us into your office in a couple days, or you can come to ours, whatever suits you best, and we'll tell you all about them.
McDormand emerged victorious against Saoirse Ronan ("Lady Bird"), Streep ("The Post"), Sally Hawkins ("The Shape of Water") and Margot Robbie ("I, Tonya").
In the black comedy drama, McDormand played Mildred, the disillusioned and angry mother of a young woman whose murder has gone unsolved in her small-town American community.
When local cops fail to catch the culprit, Mildred takes things in her own hands, putting up a series of brutal and hard-hitting billboards in her neighbourhood, calling out the police for their indifference and inaction.
Born on June 23, 1957 in Chicago, Illinois, McDormand earned her BA in Theater from Bethany College in 1979 and her MFA from Yale in 1982.
She started her career onstage and has retained her association with the theatre throughout her career. She made her film acting debut in 1984 with "Blood Simple", the first film by the Coen brothers -- Joel and Ethan Coen. Same year she tied the knot with Joel and in 1995 the two adopted a son from Paraguay, Pedro McDormand Coen.
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