Don Henley sang "She's Got a Way" and Garth Brooks sang a medley of "Only the Good Die Young," ''Allentown," and "Goodnight Saigon," joined by a choir of Vietnam veterans. Joel has explained he wrote "Saigon" because he wanted to write a song about the soldiers' experience.
Rufus Wainright sang "New York State of Mind" and led the audience in a finale of Joel's original hit, "Piano Man."
Joel said the honor stands apart from his six Grammys.
"This is different. It's our nation's capital," he told The Associated Press. "This is coming more from my country than just people who come to see me. It's a little overwhelming."
The 64-year-old musician born in the Bronx has been playing the piano since he was a boy, growing up on New York's Long Island. There was always music in the house, he said. His mother sang. His father played the piano.
Impressing girls, though, is what hooked Joel into making a career of music, he said.
President Barack Obama saluted the honorees Sunday night, and top entertainers offered tribute performances for each honoree. The show will be broadcast Dec. 29.
"The diverse group of extraordinary individuals we honor today haven't just proven themselves to be the best of the best," Obama said. "Despite all their success, all their fame, they've remained true to themselves — and inspired the rest of us to do the same."
After criticism in recent years that the Kennedy Center Honors had been excluding Latinos, the first song this year was in Spanish. Fher Olvera, the lead singer of the Mexican rock band Mana, led off with a medley of Santana tunes, "Corazon Espinado," ''Black Magic Woman" and "Oye Como Va" for a tribute to the 66-year-old Santana.
An immigrant from Mexico who began learning English from American television, Santana is one of only a few Latinos who have received the honor so far. He first picked up the guitar after hearing blues and rock 'n' roll on the radio, and he wanted to be like his mariachi musician father. His family moved to San Francisco. By the age of 22, he was playing at Woodstock.
In a tribute, musician Harry Belafonte joked that something should be done about Mexican immigration because he'd been overshadowed by Santana's fusion of rock, blues, African and Latino sounds. Santana is perhaps best known for his album "Supernatural" that won nine Grammys.
"Now Carlos is a citizen of the world. He belongs to all of us," Belafonte said. "Carlos, you haven't transcended race and origin. Really, who of us has? You continue to be informed by the immigrant experience on the journey to the great American dream."
Before the show, Santana said he'd never been to the Kennedy Center before but the award stands apart for him because it came during the Obama administration.
"It's really supreme because the award is being given to me by a black man. If it wasn't like that, I would say just send it to me," Santana said. "But since it's Mr. Barack Obama, I definitely had to make myself present and say from the center of my heart, 'you are the embodiment of our dreams and aspirations.'"