The former leader of the UK Independence Party, Nigel Farage, was also on the list for his role in the successful campaign for Britain to leave the European Union.
Mrs Clinton came second in the selection, Time’s managing editor Nancy Gibbs said, adding that the choice of Mr Trump was “straightforward”.
Time said the president-elect had redrawn America’s political rules.
The magazine invites readers to vote on who they think has earned the title, but the final decision is made by editors.
Others considered included gold-medal winning US gymnast Simone Biles, singer Beyonce Knowles and Facebook CEO Mark Zuckerberg.