The new century was the era when computer generated imagery (CGI) finally came of age. It gave studios the confidence to return to the major epic, such as The Lord of the Rings trilogy and one of the decade's first big winners, Roman epic Gladiator.
The Bollywood industry also began to spread its wings and make inroads with Western audiences, with films like Lagaan and Devdas.
The decade began with the emergence of a new talent. British theatre director Sam Mendes transferred successfully to film, winning the best director Oscar for American Beauty.
Ridley Scott evoked memories of Ben Hur when Gladiator took the main honours at the 2001 ceremony. The film received 12 nominations and won five awards, including best picture and best actor, for Russell Crowe.
Scott himself lost out on the best director Oscar to Steven Soderbergh, who won for Traffic.
Crouching Tiger, Hidden Dragon became the most successful non-English language film in history and came close to Oscar glory but was beaten by Scott's more traditional epic.
In 2002 Halle Berry made history by becoming the first black woman to win a best actress Oscar. At the same ceremony Denzel Washington became only the second black man to win a best actor trophy.
Adding to the history-making air of the evening, Sidney Poitier, who was the first black performer to win a best actor statuette, received an honorary Oscar.
The acting awards almost overshadowed the big wins for Ron Howard's A Beautiful Mind.
The Lord of the Rings became the blockbuster series to dominate the new decade. Although the first two parts of Peter Jackson's trilogy ruled at the the box office and the first film won several nominations, there was little impact on the Academy in terms of awards.