Madonna didn't perform, but asked fellow Michigan natives Iggy Pop and the Stooges to sing "Burning Up" and "Ray of Light."
Inductee John Mellencamp, with his son Speck playing guitar and his parents watching from a balcony above the Waldorf Astoria Hotel ballroom, joined the rock-kicking with a rumbling version of "Authority Song."
"I wrote this song, and I still feel the same way today as I did when I wrote it 25 years ago," Mellencamp said.
Justin Timberlake, Billy Joel and Tom Hanks inducted Madonna, Mellencamp and the Dave Clark Five respectively.
The show, which aired on VH1 Classic, was much freer than most other awards ceremonies, with inductees and presenters given plenty of time to make their speeches - some of which included expletives and racy references.
Madonna recalled her dance teacher, Christopher Flynn, who encouraged her to follow her dreams when she was only 14.
"Thirty-five years later, people are still encouraging me to believe in my dreams," she said. "What more could I ask for?"
Even the people who "said I was talentless, that I was chubby, that I couldn't sing, that I was a one-hit wonder, they helped me, too," she said. "They inspired me because they made me question myself repeatedly and pushed me to be better."
Timberlake, who helped produce Madonna's upcoming album, inducted her with an innuendo-ladened speech.
"The world is full of Madonna wanna-bes. I might have even dated a couple," said Britney Spears' ex. "But there is truly only one Madonna."
Timberlake told of how he felt ill one day while working on Madonna's new album and she asked whether he wanted a B-12 shot. He said sure, expecting a doctor to show up, but Madonna pulled out a syringe and said, "Drop 'em."
After he pulled his pants back up, "She looked at me and said, 'That's top shelf,' and that was one of the greatest days of my life," he said.
"Everything he said is basically true," Madonna confirmed, "but I didn't say 'Drop 'em.' I said, 'Pull your pants down.'"
Mellencamp talked of having surgery for spina bifida when he was 6 weeks old, saying doctors were worried he would be paralyzed below the neck. The 56-year-old rocker said he never knew of the surgery until his teen years, when a classmate asked him about the scar behind his neck.
His grandmother always whispered in his ear, "Buddy, you're the luckiest boy alive."
"I'm lucky to be standing here for any number of reasons," said Mellencamp, a heart patient who snuffed out a cigarette as he took the stage.
Fellow Hall of Fame member Joel, who inducted Mellencamp, said, "You scared us a couple of times when we thought we might have lost you a couple of times, even though it might have been a good career move."
The world needed Mellencamp's voice, he said.
"They need to hear somebody out there feels like they do, in the small towns or the big cities," Joel said. "And it doesn't matter if they hear it on a jukebox in a gin mill or on a ... truck commercial."
Gamble, taking the stage with his longtime partner, invited the audience to answer back his wish for "peace."
"Thank you so much, because that's exactly what our music represented," Gamble said.
Patti LaBelle performed a chandelier-shaking rendition of Harold Melvin & The Blue Notes' "If You Don't Know Me By Now" to introduce Gamble and Huff. The songwriters and producers created a lush, melodic brand of soul known for their hometown and performed by a variety of artists.
Gamble cited one of their songs: Billy Paul's tale of the adulterous affair in "Me and Mrs. Jones."
"There's a little 'Me and Mrs. Jones' going on here in New York," he joked in reference to a sex scandal involving the state's governor, Eliot Spitzer.