Loren, now 76 and with her famous hour-glass figure intact, did not attend that 1961 Academy Award ceremony. She told an audience of some 800 actors, directors, friends and family on Wednesday she never dreamed an Italian in an Italian-language film would earn the movie industry's highest honour.
"The Academy Award changed my life completely," she said at the tribute organized by the Academy of Motion Picture Arts and Sciences. "It helped me to believe in myself and encouraged me to push my own artistic boundaries."
"There are no words to describe my emotions right now. It is hard to imagine that 50 years have passed since I welcomed my Oscar to my home," she added.
Regarded as the most famous living Italian actress with more than 80 movies, Loren received a lifetime achievement Oscar in 1991 and was declared "one of world cinema's greatest treasures."
On Wednesday, she was feted with tributes and clips of the most famous roles from her 1950s to 1970s heyday, including "Marriage Italian Style," "A Special Day," "Yesterday, Today and Tomorrow" and Hollywood films "El Cid" and "Man of La Mancha."
With most of her co-stars and directors long dead -- Marcello Mastroianni, Gregory Peck, Frank Sinatra, Charlton Heston, Cary Grant, Marlon Brando and her producer husband Carlo Ponti -- the speeches were left to a younger generation.
Rob Marshall, who directed Loren in her most recent feature film "Nine" in 2009, said working with her was "the most magic I will ever have."
Tom Hanks called her "timeless, beautiful and authentically real." Christian De Sica described the frequent pairing of Loren with his father, Italian director Vittorio De Sica, as "like a cappuccino -- no-one could tell the milk from the coffee."
Exuberant Italian actor and director Benigni, himself an Oscar winner for the 1997 movie "Life is Beautiful," sang to Loren in a video message and her son Edoardo Ponti fought back tears as he told her: "We are here because we love you and you deserve every single thing."