Candidates for membership are proposed by current Academy members and then voted on by committees consisting of prominent representatives of the Academy's 14 branches - directors, screenwriters, documentary filmmakers, etc. A candidate normally has the backing of at least two members of the branch for which he/she may qualify. Candidates must receive an endorsement by the appropriate branch executive committee before their name is given to the Board of Governors for its approval.
The Academy has tightened their entrance standards, with only the most impressive candidates invited to join the distinguished group. Academy Award nominees, if not already members, are automatically considered for membership (but not guaranteed an invitation to join).
The majority of the members are from the United States of America, however membership is not limited to U.S. citizens. Members remain eligible to vote until they have passed on or opted for retired (non-voting) status.
SOURCE: The Academy of Motion Picture Arts and Sciences