The music industry charity celebrated Diamond for his philanthropy, which included donating concert merchandise sales last fall to relief efforts for Texas areas ravaged by Hurricane Ike.
Surrounded by his children and grandchildren, Diamond listened as more than 50 years of what he called "my little musical creations" were interpreted for 2,200 people at the Los Angeles Convention Center.
"I love you for it," he told the crowd.
The singer-songwriter thanked his mother, Rose, who was in the audience, recalling how his parents bought him a $10 guitar as a youngster in Brooklyn.
"They paid it off a dollar a week for 10 weeks," he said. "It was a good investment, Mom. You invested $10 and made a life for me."
Jonas Brothers kicked off the show with "Forever in Blue Jeans."
"Aren't they adorable?" host Jimmy Kimmel joked. "These kids wouldn't even have sideburns if it weren't for Neil Diamond."
Kid Rock did "Thank the Lord for the Night Time."
Diamond slow-danced with Faith Hill during their duet on "You Don't Bring Me Flowers" and kissed her hand.
He got the crowd on its feet for "America" and kept them there for a singalong finale to "Sweet Caroline." In the audience, comedian Sarah Silverman wrapped her arms around boyfriend Kimmel as they swayed to the music.
In a nod to Diamond's sparkly duds of the '70s, Kimmel told him he was "one of the few Jews who look good in sequins."
