The 'Magic Mike' star has been awarded the annual title by the publication and admits he thought they were "messing" with him when he got the news.
The modest actor, who is married to his '10 Years' co-star Jenna Dewan, told the magazine: "My first thought was, 'You are all are messing with me.' I told Jenna after we'd been in the bathtub washing our dogs because they'd gotten skunked. She was like, 'What?' "
Channing, 32, also revealed his wife has started to call him by his new title rather than by his name.
He said: "Yeah, she calls me [the Sexiest Man Alive] now. And who can blame her?"
Although Jenna, 31, is happy to be married to the Sexiest Man Alive she is adamant there is more to her husband than just his handsome looks and toned body.
She said: "People know him to be fun and sexy, but they don't know how emotionally deep and spiritually open he is. He is such an open-hearted person; what you see is what you get."
Channing also revealed he and Jenna, 31, are planning to start a family and he is keen to have lots of kids.
He said: "I'm ready; I think she's ready. The first number that pops into my head is three, but I just want one to be healthy and then we'll see where we go after that.
"It's really easy for us guys to say, 'I want like 15 kids'. Jenna will be like, 'Well you better get another wife!'"
Other famous heartthrobs to make the top ten of People's poll include last year's winner Bradley Cooper, Liam Hemsworth, 'The Wire' star Idris Elba, actor Chris Evans, Jennifer Aniston's fiance Justin Theroux and Ryan Gosling.
People magazine will publish its full list of the 100 Sexiest Men Alive in their next issue which hits news stands.