Dudley Moore attended the ceremony in a wheelchair
The 66-year-old star received his award from the Prince of Wales, after being honoured in the overseas and diplomatic Birthday Honours list in June.
Moore, who is suffering from the degenerative brain condition Progressive Supranuclear Palsy, attended the ceremony in a wheelchair.
The Prince of Wales, dressed in his naval uniform, bent down to congratulate Moore as he awarded him his medal.
The prince talked to the actor for around half a minute. Moore's condition makes speech difficult, although he has not lost any powers of understanding.
Moore was asked afterwards if he ever thought he would receive an honour at Buckingham Palace, to which he replied simply: "No."
'Frustrating'
Moore had flown to the UK from his home in New Jersey, US, where he lives with his close musician friends Brian Dallow and his wife Rena Fruchter.
Mr Dallow, a British-born US citizen, said: "It's extremely frustrating for Dudley. He understands everything. It all goes in, but it's so difficult for him to respond."
But he added: "He was thrilled. It's a great honour for him after a life in the entertainment industry. He's delighted to be back in the UK."
Moore was also accompanied by his 76-year-old sister Barbara Stevens, also in a wheelchair.
Mrs Stevens lives in the Cotswolds and has not seen her brother in two years.
She said: "This day means a lot for both of us. I'm very proud of him. He's achieved so much."
Hollywood
Moore won worldwide stardom for his 1960s comic partnership with the late Peter Cook.
The duo's Dud and Pete act made them comedy icons on both sides of the Atlantic.
Moore then went on to pursue a successful career in Hollywood, starring in a number of hit screen comedies.
Most notably, he played alongside Bo Derek in the movie 10 in 1979.
His role as a hard-drinking millionaire in the 1981 film Arthur then won him an Oscar nomination.
Moore is also famous for being an accomplished musician and songwriter.
His showbusiness career has more recently been curtailed by ill health.
He told the public of his condition in September 1999, saying that his vision had become hazy, his walking was impaired and speech slurred.
He said in a TV interview: "I am trapped in this body and there is nothing I can do about it."