Jackson won an Oscar in 2004 for directing The Return of the King
Oscar-winning director Peter Jackson said he was "incredibly humbled" after being made a Knight Companion of the New Zealand Order of Merit.
The 48-year-old film-maker was knighted by Governor-General Anand Satyanand at a ceremony in Wellington on Wednesday.
The knighthood is one of the first to be awarded in New Zealand since the honour was reinstated last year.
Jackson, director of the Lord of the Rings trilogy, said he was accepting on behalf of his many collaborators.
"The truth is, making movies is not a solo effort - it involves hundreds of people, thousands of people - so I feel as though I'm accepting it on behalf of the industry," he said.
All three Lord of the Rings films were shot in New Zealand, helping to establish the country as a major film production location.
Anand Satyanand (right) is the Queen's representative in New Zealand
Knighthoods were abolished in 2000 by former Prime Minister Helen Clark but were reinstated in 2009 by her successor, John Key.
Jackson's knighthood, for services to the arts, was announced at the end of last year as part of New Zealand's annual New Year honours.
He was previously made a Companion of the New Zealand Order of Merit in 2002.
Jackson's other films include his 2005 remake of King Kong and his recent adaptation of Alice Sebold's novel The Lovely Bones.
His current projects include two films based on JRR Tolkien's The Hobbit and three films based on classic cartoon hero Tintin.