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The AFI Life Achievement Award (not to be confused with the Honorary Academy Award) was established by the Board of Directors of the American Film Institute on February 26, 1973 to honor a single individual for his or her lifetime contribution to enriching American culture through motion pictures and television. The Trustees initially specified that the recipient must be one who fundamentally advanced the art of film and whose achievements had been acknowledged by the general public as well as by film scholars and critics and the individual's peers. The Trustees also specified that the work of the recipient must have withstood the test of time.

Director John Ford was the unanimous choice of the Board of Trustees for the first award as he "clearly stands preeminent in the history of motion pictures." President Richard M. Nixon attended the gala dinner at which Ford was presented the award on March 31, 1973.

The Board of Trustees later amended the "test of time" requirement to enable the AFI Life Achievement Award to be presented to individuals with shorter careers, such as Tom Hanks, who at age 46, was the youngest recipient ever, and Steven Spielberg, who received the award at age 49.

All 34 Life Achievement Award ceremonies have been televised. Agreeing to appear at the televised ceremony apparently is part of the AFI's criteria for selecting the award.^{[citation needed]}

The televised ceremony generates income for the AFI, which is no longer funded by the US federal government. Due to the exigencies of television, the popularity of the award recipient in terms of potential ratings likely is a factor in selecting the Life Achievement Award honoree, which could explain why it never has been awarded to such major American directors as Robert Altman and Francis Ford Coppola, both of whom were Film Society of Lincoln Center Gala Tribute honorees, or such distinguished actors as Robert Redford, Robert Duvall and Gene Hackman, the latter of whom was a recipient of the Hollywood Foreign Press Association's Cecil B. DeMille Award for life achievement.

Politics also seems to be a factor in the award, as that likely was behind the notable omissions of Charles Chaplin, exiled from America during the Cold War for his left-wing sympathies, director Elia Kazan, controversial due to his testimony before the House Un-American Activities Committee during the Cold War, and Charlton Heston, whose presidency of the National Rifle Association made him unpopular in many circles. Heston was the chair of the AFI Board of Trustees that created the award in 1973.

Other notable omissions were Claudette Colbert, George Cukor, Audrey Hepburn, Bob Hope, Shirley MacLaine, and Mike Nichols, all recipients of a Lincoln Center Gala Tribute.

Sir David Lean, Sir Alfred Hitchcock, and Sir Sean Connery are the only non-Americans to win the award. Notable omissions of non-Americans are Alec Guinness and Laurence Olivier—winners of both life achievement Oscars and Lincoln Center Tributes—and Michael Caine, Federico Fellini, and Yves Montand, recipients of the Lincoln Center honor.

• 1973 John Ford
• 1974 James Cagney
• 1975 Orson Welles
• 1976 William Wyler
• 1977 Bette Davis
• 1978 Henry Fonda
• 1979 Alfred Hitchcock
• 1980 James Stewart
• 1981 Fred Astaire
• 1982 Frank Capra
• 1983 John Huston
• 1984 Lillian Gish
• 1985 Gene Kelly
• 1986 Billy Wilder
• 1987 Barbara Stanwyck
• 1988 Jack Lemmon
• 1989 Gregory Peck
• 1990 David Lean
• 1991 Kirk Douglas
• 1992 Sidney Poitier
• 1993 Elizabeth Taylor
• 1994 Jack Nicholson
• 1995 Steven Spielberg
• 1996 Clint Eastwood
• 1997 Martin Scorsese
• 1998 Robert Wise
• 1999 Dustin Hoffman
• 2000 Harrison Ford
• 2001 Barbra Streisand
• 2002 Tom Hanks
• 2003 Robert De Niro
• 2004 Meryl Streep
• 2005 George Lucas
• 2006 Sean Connery
• 2007 Al Pacino