"So many people who've been a great influence on me creatively - and also I've long adored cinema from this region, so I feel incredibly blessed to be here tonight."
Blanchett's award was presented by former Lord of the Rings co-star and veteran British actor Sir Ian McKellen.
He introduced her by saying: "The strong woman, the great actress, Cate Blanchett."
Before she took the stage clips from many of her films were shown along with tributes from directors and others in the film industry.
The BFI fellowship is awarded to individuals in recognition of their outstanding contribution to film or television.
Blanchett has also won Academy Awards for her acting in Martin Scorsese's film The Aviator and Woody Allen's Blue Jasmine.
Two of her newest films, Carol and Truth had gala screenings at the institute's London Film Festival this month.
Latest achievement Truth is about investigative journalism and politics. In Carol she portrays married woman embarking on a lesbian romance in 1950s New York.
- AP