Both actors have previously appeared on the Oscar show, but neither has hosted.
The duo has about three months to get ready. Academy Awards will be presented on Sunday, Feb. 27, 2011.
"James Franco and Anne Hathaway personify the next generation of Hollywood icons--fresh, exciting and multi-talented. We hope to create an Oscar broadcast that will both showcase their incredible talents and entertain the world," Oscar telecast producers Bruce Cohen and Don Mischer said in a press release.
Franco is known for his role as Harry Osborn in the "Spider-Man" trilogy. He appears in the newly released film, "127 Hours." Franco's other film credits include: "Date Night," "Eat, Love, Pray" and "Pineapple Express."
Hathaway appears in the movie "Love and Other Drugs." She also starred in "Bride Wars," "The Devil Wears Prada" and "The Princess Diaries."