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 paid tribute to his mother for raising him well as a single mother.
The actor-musician also mentioned the people of Ukraine and anti-government demonstrators in Venezuela in his winning speech.
"To all the dreamers out there around the world watching this tonight in places like the Ukraine and Venezuela, I want to say we are here and as you struggle to... to make your dreams happen, to live the impossible... We're thinking of you tonight," Leto said while accepting his trophy.
Leto saw off competition from Barkhad Abdi (Captain Phillips), Bradley Cooper (American Hustle), Michael Fassbender (12 Years a Slave) and Jonah Hill (The Wolf of Wall Street).
While the actor ticked off the usual names to thank you, he dedicated his win to AIDS victims.
"36 million people who have lost the battle to AIDS and to those of you out there who have ever felt injustice because of who you are or who you love, tonight I stand here in front of the world with you and for you. Thank you so much and goodnight," Leto added.
In "Dallas Buyers Club", Leto plays a transgender woman who forms an unlikely friendship with a homophobic man.
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".
He did not look back and from TV and landed his first film role in the 1995 drama "How to Make an American Quilt" followed by "Black and White", "Fight Club", "American Psycho" among others.
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".