Watt also picked up the Best Original Screenplay award for the low-budget movie, her first feature-length production, at the Melbourne ceremony.
Elsewhere, the Best Lead Actor and Best Lead Actress honors went to Little Fish co-stars Hugo Weaving and Cate Blanchett, respectively.
Russell Crowe, who hosted the event, picked up the International Award for Best Actor for his performance in Cinderella Man, while Emily Browning took home the International Award for Best Actress for Lemony Snicket's A Series of Unfortunate Events.
Rockers Nick Cave and Warren Ellis won Best Original Music Score for The Proposition.
The winners at the 2005 AFI Awards included:
Best Film--Look Both Ways
Best Lead Actor--Hugo Weaving for Little Fish
Best Lead Actress--Cate Blanchett for Little Fish
Best Direction--Sarah Watt for Look Both Ways
Best Original Screenplay--Sarah Watt for Look Both Ways
Best Adapted Screenplay--Robert Connolly, Elliot Perlman for Three Dollars
Best Supporting Actress--Noni Hazlehurst for Little Fish
Best Supporting Actor--Anthony Hayes for Look Both Ways
Best Editing--Alexandre De Franceschi, John Scott for Little Fish
Best Original Music Score--Nick Cave, Warren Ellis for The Proposition
Best Production Design--Chris Kennedy for The Proposition
Best Costume Design--Margot Wilson for The Proposition
Best Sound--Sam Petty, Peter Grace, Robert Sullivan, Yulia Akerholt for Little Fish
Best Cinematography--Benoit Delhomme for The Proposition
International Award for Best Actor--Russell Crowe for Cinderella Man
International Award for Best Actress--Emily Browning for Lemony Snicket's A Series of Unfortunate Events
International Award for Excellence in Filmmaking--Roger Savage for House of Flying Daggers
Byron Kennedy Award--Chris Kennedy
Longford Life Achievement Award--Ray Barrett
Readers' Choice Award--Cate Blanchett
Young Actor Award--Sophie Luck for Blue Water High
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