The filmmakers donned traditional robes to pick up their fine arts degrees in recognition of their "contribution of distinction to the art of the moving image" at the AFI commencement ceremony in Los Angeles.
Brooks was first to be honoured, and he took to the podium to offer up some frank advice to the Class of 2012.
He told the graduates, "A word of advice is to writers, if you really don't feel it, if you're really not moved emotionally... don't write it... Don't say to yourself, 'This is funny. They'll like it.' That's bulls**t - it will never work. If you don't laugh, nobody will laugh."
Lynch paid a special tribute to Brooks when receiving his diploma, calling him "crazy" for recruiting him to direct the 1980 drama The Elephant Man when he was still a Hollywood newcomer.
He said, "If AFI put me on the map, which they certainly did, Mel Brooks put me on top of a beautiful mountain.
"He called me a madman, and he called me Jimmy Stewart from Mars, but he's the crazy one - he picked me having made only one feature film to go over to London, England to direct a Victorian drama starring Anne Bancroft, Sir John Gielgud, Dame Wendy Hiller, Anthony Hopkins, and John Hurt to name a few. It was my great good fortune that Mel had this kind of insanity."