Heath Ledger has been nominated for a best actor award.
Ledger is up against Terrence Howard for Hustle and Flow, David Strathairn for Good Night, Good Luck, Capote’s Philip Seymour Hoffman and Joaquin Phoenix who plays Johnny Cash in Walk the Line.
Other Australians Russell Crowe and Eric Bana missed out on nominations for their roles in the films Cinderella Man and Munich.
Building on his success at the Golden Globes, Taiwanese director, Ang Lee, has been nominated for best director.
The Academy Awards ceremony will take place in Los Angeles in Hollywood on 5 March.
If Brokeback Mountain manages to clinch the award for best film it will become a trailblazer as the Academy of Motion Picture Arts and Sciences has never awarded its top honour to a film with an overtly gay love story.
The challengers
The biggest challenge for best film may come from the moody racially charged urban drama Crash and George Clooney’s Good Night, Good Luck.
Other contenders include the Truman Capote story, Capote, for which actor Philip Seymour Hoffman has also clinched a nomination for best actor and Steven Spielberg’s Munich about the aftermath of the killings of Israelis in the 1972 Olympics.
Queensland’s Dion Beebe has been nominated as best cinematographer for Memoirs of a Geisha.
This year’s nominations marks a triumph for independent film over big Hollywood blockbusters, as only one of the five best film nominees had a budget over US$15m (A$20m).