The 44-year-old comic actor said the award meant a lot. He thanked the Kennedy Center as "one of the few places that uphold comedy as what it truly is, an art form."
Several other comedians came out to honor Ferrell including Conan O'Brien, Jack Black and Ben Stiller.
When he was awarded the prize, Ferrell promptly dropped it on stage and tried to pick up the broken pieces. He joked that he had turned the prize down 13 times before but decided to accept this time because of the prize money (there isn't any).
Ferrell grew up in Irvine, Calif., went to college at the University of Southern California and got his start in comedy with the Los Angeles improv group, The Groundlings.
Ferrell, who once starred on "Saturday Night Live," went on to make several films including "Anchorman: The Legend of Ron Burgundy" and "Old School." He also co-founded the popular website FunnyorDie.com.
Thirteen other people have won the Mark Twain Prize since 1998, including Tina Fey, Bill Cosby, Steve Martin and Whoopi Goldberg. It recognizes people who have followed the tradition of Samuel Clemens, the writer known as Mark Twain who used social commentary and satire to have an impact on society.
The show was taped for broadcast Oct. 31 on PBS stations nationwide.
The Associated Press contributed to this story.