The 'Into the Woods' actress and the 'Higher Ground' hitmaker were among 18 recipients of the US' highest civilian honour at a ceremony at the White House, where they were given the medals by President Barack Obama.
As he gave the 65-year-old actress - who is married to Don Gummer - her medal, the president gushed about how much of a fan he is of her work.
He said: "I love her. Her husband knows I love her. Michelle knows I love her. There's nothing that either of them can do about it. Meryl is truly one of America's leading ladies.
"She's done it all for her craft. She's sung ABBA [in 'Mamma Mia!']. That's something."
Stevie, 64, was introduced by his legal name Stevland Morris and the president recalled how his 1972 album 'Talking Book' was the first album [he] ever bought with [his] own money."
He added: "I was 10 years old, maybe 11 -- with my own cash. I didn't have a lot of it. And that thing got so worn out ... Young people, you won't remember this, but they had albums."
Though 19 people were supposed to take the honour, Broadway composer Stephen Sondheim was unable to make the ceremony so will collect his at next year's reception.