The Italian icon, 76, was the guest of honour at the event, staged by the Academy of Motion Picture Arts and Sciences bosses, which featured tributes and clips of her most famous roles.
During the evening, Hollywood stars told of their memories of Loren, with Rob Marshall - who directed Loren in movie musical Nine - recalling that working with her was "the most magic I will ever have".
Hanks also took to the stage at the Beverly Hills bash to honour the "timeless, beautiful and authentically real" actress, while Travolta called her the "most delicious" thing to come out of Italy.
Italian actor and director Roberto Benigni surprised Loren by singing to her in a video message.
Her family was also present at the gala, and her son Edoardo Ponti fought back tears as he declared, "We are here because we love you and you deserve every single thing."
Loren, who was the first person to win an acting Oscar for a foreign-language role with the Italian movie Two Women, was overwhelmed by the tribute, saying, "The Academy Award changed my life completely. 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."
Asked by Crystal, the host for the evening, if she's happy with her career to date, Loren replied, "You are never content. You always want to do more and find the right thing at the right time. I like my career, my life, so much. I was born for this. I am sick when I don't work for a year or two."