"It is such a powerful message about the power of compassion and kindness and forgiveness," Yousafzai said in a red carpet interview. "And this is something that anyone can relate to, from any corner of the world."
In the film, Richard "Mac" McKinney admits he had a deep hate for Muslims and was planning to bomb The Islamic Center in his Muncie, Indiana, community. He decided to visit the mosque to gather intelligence about these people he so hated. Then, eight weeks later, everything changed.
"It's a powerful story and its transformative," producer Conall Jones said. "People are not prepared. We try as much as we can to prep people but they're changed after they see it."
Dressed in a silver Ralph Lauren gown, Yousafzai said her dress represented "peace, love, harmony."
International activist Malala Yousafzai produces Oscar nominated documentary short film
"I feel so much myself in it," she said.
"It's so much fun," Yousafzai said of being at the Academy Awards. "I can't wait to see all my favorite celebrities. I'm rooting for Michelle Yeoh, I can't wait to see Austin Butler, and I hope that everybody has the best moment here.
"I'm just here to enjoy my time and watch Rihanna perform, so a lot of amazing things will be happening tonight."
Yousafzai is not the only Nobel laureate with a stake in tonight's Oscars - the Peace Prize winner is joined by Nobel Literature Prize winner Kazuo Ishiguro, who is nominated for best adapted screenplay for "Looking."
The Associated Press contributed to this report.