President Donald Trump was runner-up in the prestigious ranking, ahead of his Chinese counterpart Xi Jinping.
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Time designated as "silence breakers" the individuals, mostly women, who came forward this year to publicly expose patterns of sexual harassment, assault and even rape by some of society's most powerful public figures.
Those recognized by Time range from famous actresses who took on disgraced Hollywood mogul Harvey Weinstein to ordinary women who shared their stories of abuse using the hashtag #MeToo and its foreign language equivalents.
The accusations against Weinstein, who has denied wrongdoing, proved a tipping point for a flood of sordid revelations involving other titans of Hollywood, big business, politics and the news media.
Many once-admired leaders in their fields have been fired or suspended, their brilliant careers in tatters.
One of the figures singled out by Time, Ashley Judd was the first actress to come forward on the record to make accusations against the 65-year-old Weinstein.
She was followed by more than a hundred others, and a watershed moment began.
"When a movie star says #MeToo, it becomes easier to believe the cook who's been quietly enduring for years," a Time article read.
"This reckoning appears to have sprung up overnight. But it has actually been simmering for years, decades, centuries.
"These silence breakers have started a revolution of refusal, gathering strength by the day, and in the past two months alone, their collective anger has spurred immediate and shocking results: nearly every day, CEOs have been fired, moguls toppled, icons disgraced. In some cases, criminal charges have been brought."
The Person of the Year announcement came as The New York Times published a report detailing a widespread "complicity machine" of powerful relationships that enabled Weinstein to silence or intimidate his accusers for years.
Weinstein has denied via his lawyers and spokespeople that he engaged in any non-consensual behavior. He has not been charged with any crimes, though investigations have been launched in London, Los Angeles and New York.
'Open secrets'
A number of men also have revealed they were victims of sexual abuse, including Anthony Rapp, who accused Oscar-winning actor Kevin Spacey of making sexual advances on him when he was a teenager.
More than a dozen men have since come forward with similar accusations against Spacey, some of whom were teens at the time of the alleged abuse.
On Time's cover is a composite group photograph featuring Judd, along with singer Taylor Swift and ex-Uber engineer Susan Fowler.
"The galvanizing actions of the women on our cover... along with those of hundreds of others, and of many men as well, have unleashed one of the highest-velocity shifts in our culture since the 1960s," Time editor-in-chief Edward Felsenthal said in a statement.
Calling #MeToo a "powerful accelerant," Felsenthal noted that the hashtag has been used millions of times in at least 85 countries.
"The idea that influential, inspirational individuals shape the world could not be more apt this year," Felsenthal said.
"For giving voice to open secrets, for moving whisper networks onto social networks, for pushing us all to stop accepting the unacceptable, The Silence Breakers are the 2017 Person of the Year."
Time has designated an individual or group who has most influenced the year's news and events as Person of the Year since 1927.
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