Nate D. Sanders Auctions spokesman Sam Heller said bidders from around the world, including David Copperfield, vied for the Oscar.
The 1942 Oscar was thought to be lost for decades. It surfaced in 1994 when cinematographer Gary Graver tried to sell it. The sale was stopped by Beatrice Welles, Orson's youngest daughter and sole heir.
Copperfield, who was outbid in the auction, said he admires Welles not only for his cinematic successes, but because he, too, was a magician. Welles hosted Copperfield's first television special.
The auction house declined to release the highest bidder's name. It said only a handful of Academy Awards have sold for nearly a million dollars.
Michael Jackson paid $1.54 million in 1999 for the best picture Oscar awarded to David O. Selznick for "Gone With The Wind."