President George Bush presented former Australian prime minister John Howard with the US Presidential Medal of Freedom at a ceremony at the White House on Tuesday.
Former British prime minister Tony Blair and President Alvaro Uribe of Colombia also received the medal in one of the president's last acts before leaving office.
The ABC reports the medal is America's highest civilian honour.
The citation says Mr Howard brought "unparalleled prosperity" to the Australian people and also honours his efforts to "combat the scourge" of terrorism.
Mr Howard was in Washington on 11 September, 2001 and saw the Pentagon burning.
Mr Bush said he "never waivered in his support for liberty".
The BBC reports Mr Blair was also awarded the Congressional Gold Medal of Honour in 2003.
