This is the 42-year-old American actor"s first Academy award for the biographical film. The award was presented to Leto by last year"s best supporting actress winner Anne Hathaway.
Leto, who was accompanied by his mother and brother at the Oscars, paid tribute to his mother and dedicated the trophy to all the people affected by AIDS.
"Thank you for giving me this award. I thank my entire team and my mother and brother. This award is for entire "Dallas Buyers Club" team and 46 million people around the globe who battle with the disease," Leto said in his acceptance speech.
In "Dallas Buyers Club", Leto plays a transgender woman who forms an unlikely friendship with a homophobic straight man.
Leto also thanked his co-stars Matthew McConaughey and Jennifer Garner in his winning speech.
Leto moved to Los Angeles from Louisiana in order to pursue a musical career initially but he also nurtured acting dreams on the side.
The singer-actor found fame with minor roles on television shows. His first break came in 1994, after he was cast opposite Claire Danes as Jordan Catalano, her love interest, in the short-lived but well-reviewed ABC teen drama "My So-Called Life".
The "30 Seconds to Mars" frontman has already won a SAG and a Golden Globe award for his touching portrayal of an AIDS suffering transgender in "Dallas Buyers Club".
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