At a ceremony in New York the surviving members of the band were honoured alongside Michael Jackson, Paul Simon, Aerosmith and Steely Dan.
For Michael Jackson and Paul Simon this was their second ceremony, after being inducted for their work with the Jackson 5 and Simon and Garfunkel.
Also honoured were soul legend Solomon Burke, vocal group the Flamingos, Island Records founder Chris Blackwell and the late Ritchie Valens.
Chuck Berry's pianist Johnnie Johnson and Elvis Presley's guitairst James Burton, were also inducted.
Queen join some of the most famous British groups in the Hall of Fame, including the Beatles, the Rolling Stones, Led Zeppelin and the Who.
The group have sold over 100 million records worldwide and their hits have included Bohemian Rhapsody, I Want To Break Free and Radio Gaga.
Proud
The band's lead singer, Freddie Mercury, died from an Aids-related illness in 1991. He was represented at the ceremony by his mother, Jer Bulsara, and sister, Kashmira Cooke.
Guitarist Brian May told the BBC: "I know Freddie would be very proud of this."
May, Roger Taylor and John Deacon have since gone on to top the British charts with pop group 5ive when the two groups recorded a version of We Will Rock You.
The band performed the 1977 song at the ceremony, which took place at New York's Waldorf Astoria Hotel.
A Hall of Fame statement said that Queen were given the honour because "in the golden era of glam-rock and gorgeously hyper-produced theatrical extravaganzas that defined one branch of '70s rock, no group came close in either concept or execution to Queen".
Artists can only be inducted into the Hall of Fame 25 years after their first release.
Michael Jackson, who was recently in Britain to launch his Heal The Kids charity, was given his award by boy band 'N Sync.
Jackson told the audience: "The gift of music has been a blessing from God."
Rock group Aerosmith was formed in Boston 30 years ago and had hits with Dream On and Walk This Way.
Steely Dan have seen themselves elevated to legendary status after their latest album, Two Against Nature, won the best album award at this year's Grammys.
At the end of the evening the inductees took the stage to jam on Steely Dan's song Do It Again, first heard on their 1971 album Can't Buy A Thrill.
All inductees are represented in a permanent exhibition at the Rock 'n' Roll Hall of Fame and Museum, in Cleveland, Ohio.