The 71-year-old vocalist was among the 13 recipients of America's highest civilian honour at the White House and President Barack Obama, who presented the award, said he is a big fan of the musician.
"By the time he was 23, Bob's voice, with its weight, its unique, gravelly power was redefining not just what music sounded like, but the message it carried and how it made people feel. Today, everybody from Bruce Springsteen to U2 owes Bob a debt of gratitude.
There is not a bigger giant in the history of American music.
"I have to say that I am a really big fan. I remember, you know, in college listening to Bob Dylan and my world opening up because he captured something about this country that was so vital," Obama said.
The president chooses the recipients of the medal, which is awarded to people who have made major contributions to the security of the United States, world peace or culture, or have undertaken other significant public or private endeavours.