Mr. Obama, who called Wonder the soundtrack of his youth, gave the star the Library of Congress' Gershwin Prize for Popular Song during an East Room tribute that featured Tony Bennett, Martina McBride and Wonder himself. The president joked that the group was "the most accomplished Stevie Wonder cover band in history."
Wonder was emotional at times, thanking Mr. Obama for the award and reflecting on what his election as the first black president means to the United States.
"What is truly exciting for me today is that we truly have lived to see a time and a space where America has a chance to again live up to the greatness that it deserves to be seen and known as, through the love and caring and the commitment of a president - as in our president, Barack Obama," he said.
Wonder cited Martin Luther King Jr., his faith and his mother during an acceptance speech that flowed into a set of Mr. Obama's favorite songs. The Grammy-winning musician - he has 25 of the awards - joked that he looked forward to writing more love songs - perhaps a soundtrack for "you know, maybe I'll be a part of creating some more of those babies."
Wonder, 58, is native of Saginaw, Mich., and grew up in Detroit. He signed with Motown Records when he was 13.
Mr. Obama praised Wonder's decades-long career and a style that has blended pop and funk, R&B and gospel.
"Stevie has always drawn on the incredible range of traditions in his music and, from that, he's created a style that's at once uniquely American, uniquely his own, and yet somehow universal," Mr. Obama said. "Indeed, this could be called the American tradition - artists demonstrating the courage, the talent to find new harmonies in the rich and dissonant sounds of the American experience."
First lady Michelle Obama spoke in more personal terms, calling Wonder "one of the world's greatest artists." She recalled how she and her grandfather would listen to Wonder's albums together.
"He'd blast music throughout the house and that's where he and I would sit and listen to Stevie's music together - songs about life, love, romance, heartache, despair. He would let me listen to these songs over and over and over and over again," she said.
The first album she bought was Wonder's "Talking Book," and she and Barack Obama used "You and I" as their wedding song.
President Obama said he was lucky to have already loved Wonder's music when he first met his mate.
"I think it's fair to say that had I not been a Stevie Wonder fan, Michelle might not have dated me, we might not have married," Mr. Obama said, with his wife sitting in the front row. "The fact that we agreed on Stevie was part of the essence of our courtship."
Although the president is a well-known fan - Wonder performed at his nominating convention in Denver last summer and at a Lincoln Memorial concert before his January inauguration - the Library of Congress had decided to honor Wonder before Obama won the election.
The Gershwin Prize honors George and Ira Gershwin and is given for lifetime achievement in popular music. Paul Simon claimed the nation's first prize in 2007.
Wonder's performance will be broadcast Thursday on PBS stations as part of a White House series on the arts.
By PHILIP ELLIOTT