The degrees were conferred by University Chancellor Sir Menzies Campbell.
Palmer told the audience:
"I'm pleased to be here and thankful for the opportunity to see what I have seen today."
"Little did I think that in 1960 when I told my father and a friend I was coming to the Open and they said ‘really, are you ready?' what might happen 50 years later.
"It is a thrill to be back here and a real honor to be recognized by the University of St Andrews. Walking down the street in St Andrews I feel like I'm at home. Thank you all."
Tom Watson, a five-times Open winner, spoke about how as a youngster he had idolized Arnold Palmer and that the "King" had been the inspiration for his legendary battles with fellow St Andrews graduate Jack Nicklaus.
Turning to Palmer during the ceremony, Watson said: "I want to tell you…The reason I beat Jack all those times was because he beat you too many times Arnold!"
"This is indeed an honor and I'm very humbled to be here in St Andrews. St Andrews University is one of the world's greatest seats of learning. I am just a golfer and I stand here before my idol Arnold Palmer."
When asked about his seventh honorary university degree after the ceremony Palmer said, "This is certainly one that'll be very favored in my collection."
During another interview Mr. Palmer was asked how he was hitting the ball at the moment. His response of "I'm hitting it so well I can hear it land!" had people in roaring in laughter.
Founded in the 15th century, St Andrews is Scotland's first university and the third oldest in the English speaking world.