Bush was given the accolade for her services to music.
"It's a great surprise and I'm really delighted. Thanks to everyone who's encouraged and supported my work over the years," she said.
The singer released her tenth studio album 50 Words For Snow in 2011.
Bush's career began in 1978 when her single 'Wuthering Heights' hit number one in the UK singles chart.
She has since gone on to release a string of classic albums including 'The Kick Inside', 'Hounds Of Love', 'The Red Shoes', 'The Sensual World' and 'Aerial'.
Cyclist Bradley Wiggins, actor Ewan McGregor and artist Tracey Emin were among the other names to be honoured by the Queen.
Watch the music video for Kate Bush's 'Running Up that Hill' below: