The English teenager became the youngest winner of the Ladies' British Open Amateur Championship when she took the title in June aged only 16.
Taylor played in the senior Women's British Open, represented Europe in the Junior Solheim Cup and is ranked 20th in the women's amateur world rankings.
Now 17, Taylor, from Woburn Golf Club, beat cyclist Lucy Garner and swimmer Eleanor Simmonds to the award.
The youngster made a memorable debut on the Ladies European Tour, qualifying for the Slovak Open and then hitting a hole in one during the first round.
Taylor helped England win a silver medal at the European Girls Team Championships and was also a member of England's winning Ladies' Home Internationals team.
She has been now been signed by Baylor College, Dallas, Texas, on a sports-based scholarship.
Speaking about her achievements, Ryder Cup player and world number 25 Ian Poulter said: "She is not only a great golfer but an extremely well-rounded young woman.
"Lauren is a deserving winner of the award and has my full support as she moves forward with her golfing career."
Steve Robinson, English Women's Golf Association national coach, added: "Lauren has always impressed me with her work-rate, attitude and ambition along with her desire to compete - the attributes all top-class athletes require.
"Lauren is a very talented, down to earth sportsperson and has a very bright future ahead of her."
In addition to Taylor, Garner and Simmonds, the original shortlist of 10 also included: Liam Broady (tennis), Sally Brown (athletics), Tom Daley (diving), Jack Laugher (diving), Pat McCormack (boxing), Laura Robson (tennis) and Anthony Watson (rugby union).
The award is made to the outstanding young sportsperson aged 16 or under on 1 January 2011. Previous winners include Daley, Andy Murray, Wayne Rooney, Simmonds and Theo Walcott.
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