In a speech read on his behalf at the ceremony in Sweden, he said he thought his odds of winning were as likely as him "standing on the moon" while saying he was there "in spirit" and thanked the Academy for seeing his songs as works of literature.
In the speech, read out by the US ambassador in Sweden, Azita Raji, Dylan said he had joined the "rare company" of Nobel-winning writers.
He said from an early age he had read and absorbed the works of past winners and giants of literature such as Kipling, Shaw, Thomas Mann, Pearl Buck, and Ernest Hemingway.
But he said it was "truly beyond words" that he was joining those names on the winners list.
"If someone had ever told me that I had the slightest chance of winning the Nobel prize, I would have to think that I'd have about the same odds as standing on the moon," he wrote.
He said his win was surprising because he was a songwriter, rather than a writer of books and poems "taught in the schoolroom, housed in libraries across the world."
Patti Smith performed his song A Hard Rain's A-Gonna Fall at the ceremony.
But the singer, who is a friend of Dylan's, had to apologise during her rendition after nerves got the better of her and she forgot the lyrics.
"Sorry, can we stop that section," she said as the audience began to applaud her. "I apologise, I'm so nervous."
(Excerpts from BBC News)