Coach Clive Woodward and captain Martin Johnson head a long list of rugby stars named in the New Year Honours list.
Woodward, the mastermind behind England's success in the rugby World Cup, becomes 'Sir Clive' after being knighted.
And England captain Martin Johnson - who like Woodward already had an OBE - is promoted to CBE, one medal below a knighthood.
Johnson led England to a 20-17 victory over Australia to win the Rugby World Cup although it was fly-half Jonny Wilkinsons who clocked the vital score with his extra-time drop goal.
The victory was the first time a northern hemisphere country has won the Webb Ellis trophy and everyone involved has been rewarded.
"I am honoured and delighted to receive a knighthood," said Woodward.
"However, it is also a tribute to every member of the squad, the coaches, management and the Zurich Premiership clubs, who have all made a significant contribution to our success.
"The honours the squad have been awarded are richly deserved," he added.
Wilkinson is promoted to OBE having only collected an MBE medal from Buckingham Palace earlier this month.
He is joined by England's veteran prop forward Jason Leonard, who broke former France centre Philippe Sella's world record to become the most-capped player in international rugby union history with 113 appearances.
The remaining 30 members of the squad receive MBEs.
On the coaching front, Woodward's right-hand man Andy Robinson gained an OBE, with MBEs going to defence specialist Phil Larder, goalkicking guru Dave Alred and fitness coach Dave Reddin.
"It is a great honour to achieve the OBE," said 39-year-old former Bath and England flanker Robinson.
"I am involved in the sport that I love and I am employed to win games of rugby, but it's still great to receive something like this.
"My involvement with England has been fantastic - what we did in Australia was massive."
Wilkinson is the country's new sporting hero
The chief executive of the Rugby Football Union, Francis Baron, is also appointed an OBE for his services to the sport.
Baron, who lives in Sussex, is widely credited with turning around the RFU's financial position and giving the international team a sound base, since being appointed Twickenham supremo.
Baron led the tributes to Woodward, his coaching staff and World Cup-winning squad.
"Clive and his squad have produced an outstanding end to the calendar year for English rugby.
"The support of the Zurich Premiership clubs has been invaluable, and a successful partnership has been forged with them.
"Attendances are up at Zurich Premiership club games, and I was pleased that a sell-out crowd gave the squad the welcome they deserved earlier this month at Twickenham."
Earlier in December, more than 750,000 pewople turned out to cheer England's players on their victory parade through the streets of central London.
It was followed by appointments with The Queen at Buckingham Palace and a Downing Street reception hosted by the Prime Minister.
Woodward was named coach of the year, and he also collected a similar award during the BBC Sports Personality of the Year presentations, when England were named team of the year and World Cup match-winner Wilkinson took the top accolade.
A Downing Street spokeswoman indicated that Prime Minister Tony Blair had rushed forward the names of England's rugby heroes to the committee that hands out honours.
"The Prime Minister felt it was important that their fantastic
achievement should be marked as soon as possible."
The victory was England's first World Cup success since lifting football's greatest prize in 1966.
The decision to honour the entire squad so soon after their
victory was in marked contrast to the way in which England's 1966
World Cup-winning team were treated.
Some members of the side that defeated West Germany 4-2 at
Wembley, had to wait over 30 years for official recognition - a
delay that caused embarrassment to successive governments.
Alan Ball, Nobby Stiles, Ray Wilson and George Cohen - uncle of
England's Rugby World Cup-winning wing Ben had to wait until 2000 to be honoured with MBEs.
England rugby honours:
Knighthood: Clive Woodward;
CBE: Martin Johnson;
OBE: Jonny Wilkinson, Jason Leonard, Andy Robinson, Francis Baron;
MBE: Stuart Abbott, Dave Alred, Neil Back, Iain Balshaw,
Kyran Bracken, Mike Catt, Ben Cohen, Martin Corry, Lawrence Dallaglio, Matt Dawson, Andrew Gomarsall,
Paul Grayson, Will Greenwood, Danny Grewcock, Richard Hill, Ben Kay, Phil Larder, Josh Lewsey, Dan Luger, Lewis Moody, Dave Reddin, Mark Regan, Jason Robinson,
Simon Shaw, Steve Thompson, Mike Tindall, Philip Vickery, Dorian West, Julian White, Trevor Woodman, Joe Worsley.