The magazine announced "The Protester" as the "Person of the Year" on NBC's "Today" show Wednesday.
The magazine said protesters are reshaping global politics, citing dissent across the Middle East that has spread to Europe and the United States.
Facebook founder and CEO Mark Zuckerberg got the honor last year.
Time's "Person of the Year" is the person or thing that has most influenced the culture and the news during the past year for good or for ill.
Federal Reserve Chairman Ben Bernanke received the honor in 2009. The 2008 winner was then-President-elect Barack Obama. Other previous winners have included U2 frontman Bono, President George W. Bush, and Amazon.com CEO and founder Jeff Bezos.
Time said it is recognizing protesters because they are "redefining people power" around the world.
The Associated Press contributed to this report.