The award, announced Wednesday, went to all Camry variations, including the hybrid, because the car is innovative yet has a broad appeal, magazine Editor-in-Chief Angus MacKenzie said in a statement.
"The Camry is the one car rival automakers all wish they could build. It offers something for nearly everyone — performance, efficiency and roominess — at a price point most Americans can afford," MacKenzie said.
The Camry beat 26 other models that were totally new or redesigned in the year prior to Jan. 1, 2007, the magazine said.
Japanese automakers had 10 cars in the field, with six U.S. models, five from Korea, four from Germany, one from the United Kingdom and one from Sweden.
MacKenzie said the Camry won in a very strong field.
"There have never been more choices available to American car buyers. That is a fact of life in the 21st century," he said.
Through October, Toyota sold 350,481 Camrys this year to lead all cars in U.S. sales. The No. 2 car in sales is Toyota's Corolla at 330,995, according to Autodata Corp.
Staffers at the magazine evaluated the vehicles on their innovation in engineering, design, safety and technology; their performance and quality; and whether the vehicle delivers value to the consumer.
This is the first year the Camry has won the award.
Among competitors for Car of the Year were the Chrysler Sebring, Saturn Aura, Nissan Altima, Kia Rondo, Honda Fit, Mercedes-Benz S Class, Volvo C70 T5 and the Volkswagen Rabbit.
Last year's winner was the Honda Civic. Last month, the magazine named the Mercedes-Benz GL450 its sport utility vehicle of the year.