Before launching into the performance, Clarkson talked about McEntire's influence on her career and her friendship with the legendary singer.
"Sometimes when we meet our heroes it doesn't always pan out like you'd hope, but meeting Reba, being friends with her and eventually becoming family has been one of the highlights of my life, truly," Clarkson said. "So thank you so much, Reba, for listening to me vent as an artist, thank you so much for comforting me on the phone through my tears, like a friend, and thank you for being a really rad grandma to my kids."
Clarkson's powerhouse performance wowed the audience and garnered a standing ovation from McEntire herself.
"Fancy," originally written and recorded by Bobbie Gentry, was recorded by McEntire in 1990 and reached the top 10 on the country charts in 1991.
Cher, Lin-Manuel Miranda, jazz pianist Phillip Glass, jazz saxophonist Wayne Shorter, choreographer Andy Blankenbuehler, director Thomas Kail and music director Alex Lacamoire were also honored during the ceremony.
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The Kennedy Center honor isn't the only accolade McEntire has received this year. She was also given the inaugural Career Maker Award at the 48th Anniversary Nashville Songwriters Hall of Fame Gala.