Smith, who won the Best Actor in a Leading Role award for his turn in King Richard, confronted Rock after he made a joke about Jada Pinkett Smith's alopecia-caused hair loss, something she has spoken publicly about in the past.
"Jada, I love you ... GI Jane 2, can't wait to see it," Rock said in his presenting slot. The camera panned to Pinkett Smith and she rolled her eyes at the joke.
When the camera was on Smith, he was laughing, but within seconds he was on stage, where he slapped Rock around the face.
The incident sparked a wide range of reactions.
Conan O'Brien, who recently stepped back from his talk show Conan, tweeted: "Just saw the Will Smith slap. Anyone have a late night show I can borrow just for tomorrow?"
An image from inside the Vanity Fair Oscars Party shows Sarah Paulson, Amanda Peet, Jason Bateman, Taika Waititi and more gathering around a phone with shocked expressions.
Many have assumed they are watching the Rock and Smith incident play out on the small screen.
On the Vanity Fair red carpet, actress Minnie Driver was asked what she made of the incident. She replied: "I think that is deeply personal ... we were all privy to something that was emotions running really high. I really hope they will make up later.
"It was hard to watch someone's pain like that ... I understand all the sides of it."
Hamilton star Leslie Odom Jr also commented from the red carpet, saying: "This business can sometimes feel like you are walking around with your skin ripped off, it's a very vulnerable thing.
"I think we saw two artists with their hearts open, it's a vulnerable moment, sometimes it's messy but it's always beautiful when it's the truth."
Reactions of stars within the Dolby Theatre have also been pointed out by viewers on social media.
Twitter user @MarcSnetiker drew attention to Nicole Kidman, and joked: "I need every camera angle on EVERYONE."
Knocked Up director Judd Apatow wrote in a Tweet, which has since been deleted: "He could have killed him. That’s pure out of control rage and violence. They’ve heard a million jokes about them in the last three decades. They are not freshman in the world of Hollywood and comedy. He lost his mind."
Writer and poet Saeed Jones, in his post, referred to Pinkett Smith's Facebook talk show Red Table Talk, which is known for its frank and often emotional open discussions.
"Stop the damn #Oscars broadcast and drag a red table on to the stage because we need to TALK," Jones wrote on Twitter.
Aside from jokes about the incident, many have asked why Smith was allowed to remain at the Dolby Theatre and proceeded to win an Oscar.
"Regardless of what we think of the joke & all people involved, Chris Rock was assaulted at his job for doing his job," said podcaster Ryan Sickler. "The academy failed to protect him. Will Smith (laughing 1st) was allowed to stay, they gave [him] an Oscar, laughed & celebrated him."
This was echoed by journalist David Leavitt, who wrote: "Why didn’t @TheAcademy have Will Smith escorted by security out after he assaulted Chris Rock?"
TV presenter Stephen A Smith wrote: "@willsmith seriously did that — and he wins the OSCAR — he just stained the greatest moment of his career. You cannot do that S$&@!!Especially as a BLACK MAN, in that position, to ANOTHER BLACK MAN (@chrisrock) on THAT STAGE. If this was not a joke, Will won’t live this down!!!"
He later tweeted: "I just saw the RAW footage. @willsmith should be ashamed of his damn self. It was a GI Jane joke."
Smith himself has not discussed the incident on Twitter, however, a verified Will Smith account has. The account is not run by the Hollywood actor, but by a technology podcaster of the same name.
"Whelp," he tweeted, before writing: "Real talk, I’m not the person you’re upset/happy with. I make podcasts and video games for a living.
"At the risk of making people [angry] off at me instead of that other guy, the world would be a better place if we stopped answering words with violence."
The actor did touch upon the incident in his Oscar speech, saying: "Love makes you do crazy things."
Comparing himself to Richard Williams, father of Venus and Serena Williams who he portrayed in King Richard, he said: "Richard Williams was a fierce defender of his family. In this time in my life, in this moment, I am overwhelmed by what God is calling on me to do and be in this world.
"I’m being called on in my life to love people and to protect people. And to be a river to my people. And I know to do what we do, you’ve got to be able to take abuse, and you’ve got be able to have people talk crazy about you. In this business, you’ve got to be able to have people disrespecting you and you’ve got to smile and pretend like that’s okay.
"Denzel [Washington] said to me a few minutes ago, 'At your highest moment, be careful, that’s when the devil comes for you'. I want to be a vessel for love.”