The British actor, best known for A Clockwork Orange and If...., was surrounded by his friends and family.
The 68-year-old's star was unveiled outside the Pig 'n Whistle English pub on Hollywood Boulevard.
McDowell gushed: "For a lad that grew up in Liverpool, Hollywood was this notion of everything that was incredible in the movies, and Hollywood has meant so much to the rest of the world - we take it, because we live in LA, sort of for granted.
Of the star's location, he added: "My father ran a pub in Burscough in Lancashire, just outside Liverpool, so I feel that from the Bull and Dog to the Pig 'n Whistle, it's not that far."
Paying tribute to McDowell, Gary Oldman said of his standout performance in 1971's The Raging Moon: "It was like the lights went on in my life, in much the same way that John Lennon saw Elvis on screen and said, 'That's a good job, I'd like to do that for a living'.
"I saw Malcolm in this film and I thought, 'This is what I want to do'."
McDowell has more recently turned his head to US TV roles, the latest being in The Mentalist on CBS and Syfy's Philadelphia Experiment.