Alison, who graduated with a first class honours degree in fine art from the university in 1993, was honoured for her major contribution to the arts and as an ambassador for those with disabilities.
Alison said she was "completely overwhelmed" adding: "I never thought imagined in all these years that I would be back here to receive this amazing honour".
She said she promised herself she wouldn’t become emotional but there were tears as she praised those who have helped her in her career, including university staff, from janitors to lecturers: "The fact that I came away with a first class degree still blows my mind ... but I never felt like I was the only disabled student, although I was. I was able to do everything everyone else did."
Alison is renowned around the world for her work but she proclaimed her son Parys, who was in the audience, as "my greatest piece of art work and creation".
Professor Bruce Brown, Pro Vice-Chancellor (Research), in presenting the award, described Alison as a "Titan of the human spirit" and a force for everything that is good.
He said: "Alison's creative intelligence has served to challenge and change our notions of physical beauty, normality, disability and sexuality."
Despite her significant challenges, he said, academics at the then Brighton School of Art, particularly Bill Beech, recognised Alison's talent as a foremost above all and "removed every obstacle standing in the way of her ambition to become an independent fine artist – if not a famous one."
Born without arms and with shortened legs, Alison uses photography, digital imaging and painting to question physical normality and beauty.
A member of the Mouth and Foot Painting Artists of the World, Alison has used her body as subject matter for artworks and in one she put herself into the image of the world's most iconic symbol of femininity, the Venus de Milo.