Taking its title from the acronym for child of deaf adult, "CODA" follows high school teen Ruby as she juggles her musical ambitions with her family's dependence on her to communicate with the hearing world.
The film bested tough competition to secure Apple the much-coveted gong, pipping streaming rivals including Netflix as well as Hollywood's traditional studios, and delivering a landmark win for disability representation on the silver screen.
"Thank you to the academy for letting our 'CODA' make history tonight," said producer Philippe Rousselet.
"CODA" was released by Apple TV+ after a bidding war at last year's Sundance independent film festival, where it fetched a record $25 million.
The film by director Sian Heder ("Orange is the New Black"), which industry insiders suggest had a budget of just $10 million, shuns big names and expensive locations to concentrate on its crowd-pleasing story of high schooler Ruby Rossi.
Ruby, played by breakout young actress Emilia Jones, has to navigate the usual teenage trials of meeting a boy and falling in love, but with the added challenge of being the only hearing member of her deaf family.
She provides the much-needed link to the hearing world for her family's struggling fishing business in a small seaside town near Boston, but desperately wants to follow her own dreams and go off to college to sing.
Based on the French film "The Belier Family," which controversially used hearing actors to portray deaf characters, "CODA" opts for authenticity instead, with past Oscar winner Marlee Matlin ("Children of a Lesser God") a familiar face as Ruby's slightly eccentric, but vulnerable, mother.
Ruby's father, played with comic aplomb by Troy Kotsur (himself a winner for best supporting actor), and brother -- a powerful turn from Daniel Durant ("Switched at Birth") -- round out the unconventional foursome, whose on-screen chemistry is evident.
"CODA" beat out rivals in the best picture category including the bookies' favorite "The Power of the Dog" by Jane Campion, acclaimed family memoir "Belfast" from Kenneth Branagh, and Steven Spielberg's remake musical "West Side Story."
Other films in the category were Leonardo DiCaprio vehicle "Don't Look Up," sci-fi blockbuster "Dune," tennis biopic "King Richard," Japanese road movie "Drive My Car," Los Angeles love letter "Licorice Pizza" and mid-20th century carnival noir "Nightmare Alley."
Heder also won the Oscar for best adapted screenplay.
Big win for Apple
The film's dark horse status was cemented last month when it scooped the prestigious Screen Actors Guild prize for the best performance by a cast -- SAG's equivalent of the Academy's best picture Oscar.
"We're such a tight cast, so it was a lovely prize to win," Jones, who along with Heder learned American Sign Language before the film's production, told AFP soon after.
The filmmakers hired a team of sign language consultants early on to translate Heder's screenplay into ASL and provide a link between deaf and hearing actors on set.
They together picked gestures from the language's broad lexicon that were appropriate to the specific "accent" of the Massachusetts deaf community, and that would convey intuitive meaning to hearing audiences.
The unprecedented success of "CODA" in claiming the biggest prize of Hollywood's award season is a huge boon to big-spending Apple, which came late to the streaming wars and is running to catch up with the likes of Netflix and Disney+.
Industry analysts say the film's family themes and traditional underdog-overcoming-adversity storyline made it the movie equivalent of a slam dunk.
While $25 million is a lot for an indie film, that gamble has proven to be a sound one, delivering priceless value for Apple as it seeks to establish a reputation in Tinseltown and grow its subscriber numbers.