Usually brash, outspoken, and indefatigable, Giuliani displayed composure and compassion that rallied New York and the nation after the attacks.
The magazine's editors chose Giuliani for having more faith in us than we had in ourselves, for being brave when required and rude where appropriate and tender without being trite, for not sleeping and not quitting and not shrinking from the pain all around him.
This was about Sept. 11 and about how in the immediate aftermath of the attacks in those crucial hours, one person took emotional charge in a way that was extraordinary, Time Managing Editor Jim Kelly said.
He led by emotion, not just by words and actions, and in an emotional year like this one, he deserved to be person of the year, Kelly said.
He added that he knew on Sept. 11 that the Person of the Year would have some connection to the attacks on the World Trade Center and the Pentagon.
Editors spent hours debating whether to name Osama bin Laden, the prime suspect in the terror assault, for the spot, Kelly said.
But bin Laden was too small a man to get the credit for all that has happened in America in the autumn of 2001, the magazine said. It is what came after his men had finished their job that has come to define this year.
Kelly called bin Laden a moral pipsqueak.
Giuliani said the people of New York should share the honor.
New Yorkers are the people of the year, and we represent America, he said in a news conference. New Yorkers led the way as America recovered from the attacks, he said.
President Bush, Time's 2000 Person of the Year, made it to the short list again, along with bin Laden.
Giuliani said he's glad bid Laden wasn't chosen. Bin Ladens objective, said Giuliani, was to destroy the spirit of America, but now it's stronger than ever.
This was an active decision about picking Giuliani, and not a decision about not picking Bush, Kelly said.
Giuliani managed to touch us emotionally in a way that nobody else did, including the president, he said.
Kelly pointed out that after that viewing the videotape released last week showing bin Laden pleased that the Sept. 11 attacks succeeded beyond his expectations, bin Laden was not a figure with broad enough historical sweep to name as person of the year.
We are dealing here with, yes, an evil man, but not a man who deserves to stride the world stage like a Stalin and a Hitler, or even a Khomeini, Kelly said. Soviet leader Josef Stalin was Time's Person of the Year in 1939 and 1942, German dictator Adolph Hitler in 1938, and Iranian leader Ayatollah Khomeini in 1979.
Kelly said that Time, which along with other publications has sen declining advertising revenues, was not concerned about a backlash against the weekly news magazine if it had chosen bin Laden.
If we had picked him, we would have argued the case well enough to show that we didn't try to make him a hero, Kelly said.
The Person of the Year package includes an oral history of Sept. 11 as told by Giuliani and his aides. The issue hits newsstands on Monday, one week before Giuliani's last day in office after eight years.
Giuliani was barred by term limits from seeking a third consecutive term. Michael Bloomberg will be sworn in as mayor at midnight on Dec. 31.
Giuliani, 57, departs amid an outpouring of praise that contrasts with the period prior to Sept. 11, when newspapers were full of tidbits about his divorce and accounts of his angry public outbursts.
Giuliani had his share of difficulties - from a series of fatal police shootings of unarmed black men in which he reflexively defended the officers, to a losing battle with the Brooklyn Museum of Art over what he labeled indecent art.
But in the span of a few days, Giuliani's unusually gentle handling of a city in despair after the attack vaulted him from being regarded as a prickly lame duck politician who had run out of ideas to a civic saint mentioned for the Nobel Prize.
Giuliani has acknowledged recently that there are some things he could have done better.
I have the feeling that you have when you've done everything you can do, Giuliani said. Where you feel, 'Well, I haven't held back any effort.' There are things probably I would do differently in terms of judgments I would make if I could make them again, but I've given every effort that I'm capable of and tried to do as good a job as mayor as I possibly could do. So I feel happy about that at least.
© MMI, CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters Limited contributed to this report