Budenholzer led the Hawks to a franchise-record 60 victories this season, his second at the helm. Atlanta won the Southeast Division and earned the top seed in the Eastern Conference playoffs.
The Hawks had a 22-win improvement from last season's 38-44 mark. Atlanta had a 19-game win streak during the season, including a perfect 17-0 record during the month of January, which helped a team-record four Hawks earn All-Star Game selections.
Budenholzer was far from a landslide choice for this year's honor, as he received 67 first-place votes and a total of 513 points from a nationwide panel of 130 sportswriters and broadcasters to edge Golden State's Steve Kerr for the award.
Kerr, who led the Warriors to the best record in the NBA in his first season as a head coach, picked up 56 first-place votes and 471 total points. Jason Kidd of Milwaukee finished third in the balloting with 57 points and one first-place vote, followed by Boston's Brad Stevens and last year's winner, Gregg Popovich of San Antonio.
Budenholzer, who served as an assistant under Popovich, became the fourth Atlanta coach honored and first since Lenny Wilkens in 1993-94. Mike Fratello also won the award in 1985-86 and Hubie Brown was selected for the 1977-78 season.