Blair was honored for his work with the Tony Blair Faith Foundation, which promotes religious tolerance; for his initiative to improve governance in Africa; and for advancing peace in Northern Ireland and the Middle East, among other efforts.
"It is the serious, sustained involvement of ordinary citizens that makes the difference between poverty and promise, between despair and democracy, between hopelessness and hope," said David Eisner, the center's president and CEO.
Former President Bill Clinton presented the award at an outdoor ceremony on Independence Mall.
The event comes amid a publicity tour for Blair's best-selling memoir, "A Journey," which was released Sept. 1. The autobiography re-energized British and Irish anti-war protesters, who continue to blast Blair for supporting the U.S. invasion of Iraq. A hostile crowd threw shoes and eggs at him at a book-signing in Dublin this month, and he canceled a similar event in London for fear of disruption.
Blair received a much warmer reception in Philadelphia from the friendly crowd of about 1,250.
Clinton, the center's chairman, praised Blair at the ceremony for being a "wonderful world citizen" and "living a life worthy of this award."
"His faith foundation is promoting religion as a powerful force for good and reconciliation," Clinton said. "Tony Blair believes that people of faith can be people of peace."
Blair, who led Britain from 1997 to 2007, said liberty is the result of "ordinary human beings doing extraordinary things in the midst of Earth-changing events."
"Liberty is not acquired by accident," Blair said. "It's won by endeavor."
The ceremony included a performance by The Irish Tenors and a video tribute from Bono, the Irish rock star and humanitarian who received the medal in 2007. He praised Blair for his work securing the Good Friday accord in 1998 to end sectarian violence in Northern Ireland.
"Tony Blair understands the word 'compromise' better than most," Bono said.
The medal, first given in 1989, comes with a $100,000 cash prize. Blair will donate the money to his faith foundation and African Governance Initiative, which works in Rwanda, Sierra Leone and Liberia to improve the quality of life and political leadership.
Previous winners have included filmmaker Steven Spielberg, former South African President Nelson Mandela and former U.S. President Jimmy Carter. Six winners have subsequently received the Nobel Peace Prize.
The ceremony kicks off nearly a week of events leading to Constitution Day on Friday. The U.S. Constitution was adopted in Philadelphia on Sept. 17, 1787.