Minutes later while the filmmakers behind La La Land were celebrating, the show's producers stormed the stage and eventually Moonlight was rightfully given the award.
Dunaway, 77, and Beatty, 80, then announced that "The Shape of Water" won the evening's top honors. But it was unclear why they would have been given the wrong envelope - until it came to light that the chaos stemmed from a rep for the Oscars' accounting firm PricewaterhouseCoopers. And they said, it's okay.
He said: "I want to dedicate this to every young filmmaker, the youth who is showing us how things are done in every country of the world".More news: Trump says may visit Israel for embassy opening
After Beatty opened the envelope onstage, he hesitated.
In a moment of pure chaos, Jordan Horowitz, a producer of "La La Land", later set the story straight: "Moonlight" was the true victor. I...talked to them very nicely, the accountants. "This is not a joke, Moonlight, you won best picture".
Past year it was a much different story as the Bonnie And Clyde actors were at the center of an envelope mishap involving Academy Awards agency PriceWaterhouseCoopers which counts the votes.More news: Amazon Could Soon Offer Checking Accounts
Despite the infamous incident The Academy has made a decision to retain accounting firm PwC despite the now infamous Best Picture flub.
A clearly confused Beatty hesitated after opening the envelope, so he handed it to Dunaway who immediately announced La La Land.More news: People are being encouraged to report leaks as big thaw continues