Author Salman Rushdie, singer Emma Kirkby and Glastonbury founder Michael Eavis are among the entertainment figures in the Birthday Honours list.
Rushdie, 59, is made a knight for his services to literature, while classical soprano Kirkby, 58, becomes a Dame for services to music.
"I am thrilled and humbled to receive this great honour," said Rushdie.
Comedian Barry Humphries, musician Joe Cocker, actor Peter Sallis and writer Stephen Poliakoff are also honoured.
Rushdie was dramatically pitched into the limelight in 1989 when Iranian leader Ayatollah Khomeini issued a fatwa against the author for his novel The Satanic Verses, labelling it blasphemous.
The novelist was forced into hiding until the Iranian government withdrew its support for the death penalty in 1998.
Sallis has won awards as the voice of Nick Park creation Wallace
"I am very grateful that my work has been recognised in this way," said the Mumbai-born author, whose work includes Midnight's Children and Shalimar the Clown.
Barry Humphries said he was "deeply honoured" to be made a CBE for services to entertainment.
Speaking as his alter-ego Dame Edna Everage on BBC Radio 4, he said: "My manager of many years is Barry Humphries, and he has in recent years become absolutely impossible... the envy and bitterness from him.
"Barry has been chafing in a pretty undignified way. Look, don't tell anyone, I had a little word to The Queen. I said 'Please throw him a crumb'.
"He's really the David Gest to my Liza Minelli."
Michael Eavis, who first staged the Glastonbury Festival in a field in Somerset in 1970, is made a CBE for services to music.
"I've spent 37 years running my show and trying to curry favour with the authorities just to make it happen," said the 71-year-old dairy farmer.
"I'm so pleased not only for myself, but for the hundreds and perhaps thousands of people who have had faith in me and supported my ideas through thick and thin."
Sheffield-born singer Cocker said he was "genuinely surprised" by his OBE. "I am humbled to be in such illustrious company, along with many other British musicians that I admire."
Actor Peter Sallis, who is made an OBE for services to drama, became a household name playing Norman Clegg in long-running sitcom Last of the Summer Wine.
Syms returned to the big screen in The Queen last year
More recently he has won over a new generation of fans as the voice of the hapless Wallace in Nick Park's animated Wallace and Gromit films.
"Wallace's reaction to getting an OBE would undoubtedly be to get another helping of cheese," said the 86-year-old star.
"I'm quite hungry so I'll be going out to get something to eat, but no, I won't be having cheese," he added.
Other members of the acting community to be honoured include veteran actress Sylvia Syms, 77, Carmen Munroe, Glen Murphy and Bill Pertwee.
Syms' impressive list of screen credits include Ice-Cold in Alex, The Tamarind Seed and The Punch and Judy Man. She recently portrayed the Queen Mother in the Oscar-winning film The Queen.
Pertwee, cousin of Doctor Who star Jon Pertwee, is made an MBE for services to charity.
The 80-year-old remains best known for his role as air-raid warden Hodges in TV's Dad's Army. "I am rather surprised. I might have half a pint of beer with my son to celebrate," he said.
Comedy writers Ian La Frenais and Dick Clement, whose many TV collaborations include Porridge and The Likely Lads, are made OBEs.
Singer Kirkby is joined by tenor Stuart Burrows and soprano Rosalind Plowright, while music stars Norma Winstone and composer Errollyn Wallen are also honoured.
Broadcaster David Starkey and authors Rose Tremain are made CBEs, while Barbara Taylor Bradford, whose first novel Women of Substance became an international best-seller is made an OBE for services to literature.
Screenwriter Stephen Poliakoff, whose TV drama Gideon's Daughter won Golden Globes for actors Bill Nighy and Emily Blunt earlier this year, is made a CBE. Other credits include the 1991 Close My Eyes, The Lost Prince and Perfect Strangers.