The Beatles legend joined talk show host Oprah Winfrey, country singer Merle Haggard, dance legend Bill T. Jones, and playwright Jerry Herman in getting the award given for contributions to the arts.
Throughout, girlfriend Nancy Shevell was there supporting and cheering on - even reaching her hands forward to clasp his hands while an all-star cast sang Hey Jude.
Introduced by Caroline Kennedy as a 'Liverpool lad with a sublime gift for melody', McCartney sat next to the First Lady - with the President and his wife dancing joyfully when celeb guests performed McCartney songs.
Alec Baldwin introduced McCartney, joking that it was 'kind of a miracle that Paul McCartney has made it this far'.
'A big time solo career wasn't just handed to him like some lucky America's Got Talent contestant - he had to earn it,' he joked.
'All those early years slogging through groups like the Quarrymen, Johnny and the Moondogs, the Silver Beetles, and finally, the plain old Beatles.'
After a pause he quipped: 'I can't begin to tell you how awful those early years were.'
Turning serious, he said: 'Paul McCartney is a genius. Paul married rock and roll to beauty, and forever raised the bar for composers, musicians and fans.'