A Time poll showed readers favoured naming WikiLeaks founder Julian Assange this year but the magazine's editors and correspondents chose Zuckerberg.
The conservative Tea Party political movement was Time's second choice, followed by Assange, Afghan President Hamid Karzai and the 33 trapped Chilean miners.
Hitler, Stalin and the Ayatollah Khomeini have all won in the past.
The annual award is given to the person judged to have most influenced world events in the past year.
Zuckerberg was awarded "for connecting more than half a billion people and mapping the social relations among them; for creating a new system of exchanging information; and for changing how we all live our lives", Time journalist Lev Grossman said.