Brumfitt used her 2016 documentary, Embrace, to examine why people - particularly women - hate their bodies, as well as her own journey of acceptance.
Her work has since been seen in almost 200 countries and watched by millions of people on Netflix.
While many documentary makers look to find their next subject, Brumfitt's efforts to boost body positivity didn't end when the cameras stopped rolling.
She has since released a companion documentary, Embrace Kids, that targets children aged between nine and 14-years-old.
Brumfitt has also teamed up with experts to create a companion parenting book and free research hub.
The director's work on body positivity has led to her achieving her highest accolade yet: Australian of the Year for 2023.
Brumfitt said it was critical to address body-image issues, especially among young people.
"We weren't born into the world hating our bodies. This is something the world has taught us," she said.
"We have been bullied and shamed into thinking our bodies are the problem. It is working because 70 per cent of Australian school children consider body image to be their number one concern.
"It is not our life's purpose to be at war with our body."
The director said she was optimistic that kids growing up would be able to learn to grow without the shame of their bodies.
"This is not about encouraging obesity, this is not what I do, and this issue is not simply about weight or size, it's about the way that we feel about all of ourselves," she said.
"When you take your final breath on this earth, what thoughts will be going through your mind? What will you be thinking about? And no one has ever said to me the size of their bum."
National Australia Day Council chair Danielle Roche said Brumfitt's work had sparked powerful change on a personal level for many Australians and people around the world.
"Taryn has inspired millions of women around the world to be comfortable in their own skin," Ms Roche said.
Brumfitt received the honour at a ceremony in Canberra on Wednesday night.
Indigenous human rights advocate Tom Calma was named Senior Australian of the Year, while Socceroos star and refugee advocate Awer Mabil was announced as Young Australian of the Year.
Local Hero for 2023 went to Turbans 4 Australia founder Amar Singh.
"Individually brilliant, Taryn, Tom, Awer and Amar share a common bond – using their life experience as a power for good, helping others around them and making the world a better place," Ms Roche said.
"These are an extraordinary group of Australians of whom we can all be incredibly proud."
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