The list of recipients includes activists, scientists, actors, humanitarians and athletes.
President Obama says they are all agents of change. "They remind us that we each have it within our power to fulfill dreams, to advance the dreams of others, and to remake the world for our children," he said.
Several of the winners are well known champions of human rights. Among them: retired Anglican Archbishop Desmond Tutu of South Africa.
"The glint in the eye and the lilt in the voice are familiar to us all. But the signature quality of Archbishop Desmond Tutu, says Nelson Mandela, is a readiness to take unpopular stands without fear," Mr. Obama said.
Joseph Lowrey, an icon of the American civil rights movement, was also honored. So was Senator Edward Kennedy, who is suffering from brain cancer.
And there was a posthumous award to Harvey Milk, the slain gay rights activist and politician. "He would become, after several attempts, one of the first openly gay Americans elected to public office. And his message of hope, hope unashamed, hope unafraid could not ever be silenced," Mr. Obama said.
In choosing his first group of Medal of Freedom recipients, the president selected several women who have made their mark on American life. He honored former Supreme Court Justice Sandra Day O'Connor, cancer researcher Dr. Janet Davison Rowley, actress Chita Rivera, and tennis great Billie Jean King, who devoted years to opening opportunities for woman and girls in sports.
He also awarded the Medal of Freedom to Mary Robinson, Ireland's first female president and a former U.N. high commissioner for human rights. "Today, as an advocate for the hungry and the hunted, the forgotten and the ignored, Mary Robinson has not only shone a light on human suffering, but illuminated a better future for our world," Mr. Obama said.
Sidney Poitier, the first black actor to win an Academy Award, was honored by the president, as was world renowned physicist and author Stephen Hawking.
And a medal was placed around the neck of Muhammed Yunus, the 2006 Nobel Peace Prize recipient, who pioneered a way to lift people out of poverty through a community banking program that gives small loans to entrepreneurs with no collateral.
Yunus started the micro-loan program in his native Bangladesh. Before the award ceremony, he told reporters that he hopes the Medal of Freedom award will help spread the word about the micro-loan concept. "It is a very exciting moment for me because this is a big recognition for the ideas that I have been promoting, trying to let people pay attention to it. This recognition brings a lot of attention to those ideas so I am very happy about it," Yunus said.
The Medal of Freedom was established in 1945 to recognize civilians for their efforts during World War II. It was revived in 1963 as a way to honor individuals for distinguished service from all walks of life.