Bruce Cohen and Don Mischer, producers of the Feb. 27 telecast, said Monday they had chosen Franco and Hathaway as hosts because the two are rising stars with broad talent that will help turn the night into a celebration of film.
"What we have here are two really emerging talents who are very respected and are going to have, I think, magnificent careers," Mischer said. "They deserve to be there, they've got the chops to be there, they want to be there, and I think that's going to make the audience really relate to them."
Both have done serious drama and comedy. Hathaway earned a best-actress Oscar nomination for 2008's "Rachel Getting Married" and starred in such comedies as "The Princess Diaries" and "The Devil Wears Prada."
Outside the Gotham Independent Film Awards in New York, where she was presenting an award, Hathaway said she couldn't yet discuss her Oscar night duties.
"I can probably let it slip that I'm terrified and exhilarated and excited," she said.
Franco had an Emmy nomination for the title role of 2001's "James Dean," costarred in the Oscar-winning "Milk" and delivered a memorable comic turn as a spacey pot dealer in "Pineapple Express."
Hathaway also showed off her musical talents in a duet at the 2008 Oscars with the show's host, Hugh Jackman. Oscar producers were uncertain whether Franco can sing.
"There's a rumor that he can, and we will be exploring that," Cohen said.
"What we do know is they both have a great sense of humor and a great sense of comedy," Mischer said.
While most Oscar shows over the past two decades had a comedian such as Billy Crystal, Chris Rock or Jon Stewart as emcee, Hathaway and Franco continue a recent trend of using film stars.
Steve Martin, a past solo host of the Oscars, and his "It's Complicated" co-star Alec Baldwin teamed up as hosts last time, while "X-Men" and Broadway star Jackman was host the year before.
That harks back to a period in the 1950s, '60s and '70s, in between the years when Bob Hope and later Johnny Carson were fairly regular Oscar hosts, when big-screen stars would partner up as masters of ceremony.
"There was a period for many years after Bob Hope and before Johnny Carson where movie stars would host every year," Cohen said. "Mostly, that hasn't happened in years since, but perhaps we're entering another period of the glory years of movie stars hosting the Oscars."
Hillary Swank, a two-time Oscar winner for her lead roles in "Boys Don't Cry" and "Million Dollar Baby," praised the Hathaway-Franco teaming at the Gotham Awards.
"It's an interesting choice," Swank said. "It's a different choice and I think it's always fun to mix it up."
Franco and Hathaway as hosts also could revive another old Oscar night occurrence: The possibility that one or both hosts might also be nominees. Franco is considered a solid best-actor prospect for the survival drama "127 Hours," while Hathaway has a chance for a best-actress slot for the romance "Love & Other Drugs."
It happened a handful of times in decades past that hosts also wound up as nominees. Michael Caine and Walter Matthau were nominated in years they served as co-hosts, while David Niven won the best-actor Oscar for 1958's "Separate Tables" at the same ceremony in which he was co-host.
The producers say they aim to keep the Oscar show fast-paced and shorter than it has been in recent times. The show has dragged on for four hours in some years.
The job of keeping the show brisk has been made easier since lifetime-achievement Oscars and other honorary awards were moved to a separate event. But producers will have to squeeze in 10 best-picture nominees for the second-straight year, double the usual number.
Cohen and Mischer said they also plan to continue recent efforts to liven up the way some awards are presented and group awards together in ways that make sense to viewers.
"We're really hoping this year to link what James and Anne are doing thematically to the show," Cohen said. "That they are the world's window in that they are the welcoming committee, but also the two people through the evening who are taking you through this journey of giving out 24 Oscars."
AP Entertainment writer Nicole Evatt contributed to this report from New York.