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It was first created on Stardate 0/9105 by the United Earth Alliance Parliament. The Medal of Honor was considered the highest decoration that could be bestowed by Starfleet Command and the United Federation of Planets and was given to individuals who showed self-sacrifice, heroism and courage despite extreme peril that they faced whilst serving the Federation. As the recipients of these decorations were considered the embodiment of the highest ideals of the Federation, their descendants were automatically considered as possible cadets for Starfleet Academy should they choose to pursue such a career. It was a stylized UFP symbol which was superimposed on a sold gold disk set against a silver, five pointed star. A decoration was attached to a red, white and blue vertical striped ribbon. (FASA RPG module: Star Trek: The Next Generation Officer's Manual)
Captain Delrin Toval of the USS Hindenberg was one such officer awarded this medal on Stardate 219005.12 for his heroism in helping to evacuate his crew without the loss of a single life after an unprovoked attack from warships of the Klingon Empire. (FASA RPG module: Star Trek: The Next Generation Officer's Manual)
In his forty-two year career in Starfleet, James T. Kirk was the recipient of three medals of honor, one of which he gained in 2255, for his efforts in fighting against pirates while serving aboard the USS Farragut. The medal of honor was, in fact, his first ever award and he kept the award in a special display box alongside the copy of the deeds to Garrovick Valley and Farragut River on Centaurus, which were owned by Kirk's one-man company, Starstruck, Inc. (TOS novels: The Fire and the Rose, Crisis on Centaurus)
Whilst under the influence of alien spores from Omicron Ceti III, the sight of his medal of honor seemed to help create the strong emotions that allowed him to overcome the spores. (TOS episodes: "Court Martial", "This Side of Paradise")