"In every role, she reminds us to be kind to one another and to treat people as each of us wants to be treated. At a pivotal moment, her courage and candour helped change the hearts and minds of millions of Americans, accelerating our nation's constant drive towards equality and acceptance for all.
"Again and again, Ellen DeGeneres has shown us that a single individual can make the world a more fun, more open, more loving place so long as we just keep swimming."
Obama said in honouring her that she has a way of making people laugh at something rather than someone, "except when I danced on her show."
Obama also praised her courage in coming out as gay nearly two decades ago.
DeGeneres wiped tears from her eyes and embraced the President, who also appeared to be somewhat emotional.
Making it to the ceremony on time was a close call for DeGeneres, who experienced a delay in getting in because she forgot her ID.
Among those awarded the Presidential Medal of Freedom were actors Tom Hanks, Robert De Niro and Robert Redford.
Michael Jordan and Kareem Abdul-Jabbar, both legendary basketball players, are also among the honourees.
Bruce Springsteen and Diana Ross will be recognised for their music. Other honourees include philanthropists Bill and Melinda Gates and broadcaster Vin Scully.
President Obama said the people receiving the medal had helped push America forward and inspired millions around the world.
The award recognises especially meritorious contributions to the national interests of the United States, to its culture, or to other significant endeavours.
