Banjo player Martin and his band The Steep Canyon Rangers were named entertainers of the year on Thursday.
"I want to thank all the other nominees ... for losing," said Martin, accepting the award at the Ryman auditorium.
Supergroup The Boxcars took the biggest haul of the night, winning four awards, including emerging artist and instrumental group of the year.
It was the first Bluegrass Music Association award for Martin, who took up the banjo as a teenager.
"It really means a lot, sort of like winning two Oscars," said Martin, who has never won an Oscar. "It's something we work very hard at, and I kind of started from scratch.
"I've been playing banjo for 50 years, but performing in a band I've never done. The hardest part was talking and tuning."
Unfamiliar
An author, actor and stand-up comedian, the 66-year-old released his first album with the Rangers in 2009. The Crow: New Songs for the Five-String Banjo subsequently won a Grammy Award.
It was the second Grammy win for Martin, having contributed to  Foggy Mountain Breakdown in 2001, a collaboration with legendary banjo picker Earl Scruggs.
Three-time Oscar host Martin, best known for his roles in films including The Jerk, Planes, Trains and Automobiles and Roxanne, is credited with bringing bluegrass music to a wider audience.
"When I play a concert hall somewhere I know half the audience isn't even familiar with bluegrass," Martin said, before the awards.
"That way we really reach a really wide audience for this music [that] I love, and that I love listening to."
Comedian Steve Martin has won the top award at the International Bluegrass Music Association Awards in Nashville.