Author Terry Pratchett, jazz star Courtney Pine and singer Robert Plant are among the entertainment figures in the New Year Honours list.
Sir Terry, 60, said he was "flabbergasted" to be knighted for his services to literature.
Saxophonist Pine becomes a CBE, as does Led Zeppelin frontman Plant.
Frost/Nixon actor Michael Sheen becomes an OBE, actress Liz Smith is appointed an MBE, and Jenny Abramsky, former head of BBC radio, is made a dame.
Sir Terry , 60, best known for his hugely popular Discworld series of comic fantasy novels, has sold more than 55 million books worldwide.
He said: "There are times when phrases such as 'totally astonished' just don't do the job.
"I am of course delighted and honoured and, needless to say, flabbergasted."
Last year Sir Terry was diagnosed with early-onset Alzheimer's disease and has since campaigned to raise awareness of the condition.
Neil Hunt, chief executive of the Alzheimer's Society, said: "I would like to congratulate Terry on this fantastic and well-deserved achievement.
"Terry is not only a successful author and well-loved public figure; he is also playing a key role in fighting the misunderstanding and stigma surrounding dementia."
Contemporary jazz artist Pine, 44, said he was "deeply moved" to be appointed CBE.
He said: "I never imagined that I would be recognised for playing improvised music in the UK in this way.
"This acknowledgement for what I think of as a noble mission in uniting people through sound could not have been realised without the love, support and dedication of my family, management, band and the many supporters of music throughout this land - thank you, thank you, thank you."
Sheen, 39, who played former prime minister Tony Blair in 2006's award-winning film The Queen, becomes an OBE for services to drama.
He said the honour would give him the chance to meet the real monarch, after playing Mr Blair opposite Dame Helen Mirren as the Queen.
The Welsh-born actor said: "This is a huge honour. I am both thrilled and slightly mystified.
"But very grateful. It'll be nice to meet the real Queen at last."
Liz Smith, 87, famous as Nana in the sitcom The Royle Family, becomes an MBE, and singer-songwriter John Martyn, 60, becomes OBE.
Orchestral conductor Owain Arwel Hughes becomes a CBE, while concert pianist and conductor Howard Shelley is appointed OBE.
Jenny Abramsky, who left the BBC earlier this year to chair the Heritage Lottery Fund, said she was "thrilled" to become a dame.
Dame Jenny said she believed the honour "recognises the importance of radio" in the UK.
"Radio is an astonishing medium that people feel passionate about and I'm proud to have played a part in ensuring that it continues to thrive."