"I am pleased the pope isn't there because criteria were used that have absolutely nothing to do with the pope's moral and religious authority," said Vatican spokesman Rev. Federico Lombardi.
However, the editor-in-chief of Vatican newspaper L'Osservatore Romano was quoted as saying the exclusion of the pope from the list was a "disconcerting decision."
"Any newspaper editor would have scrapped that list," La Repubblica daily quoted Giovanni Maria Vian as saying.
The magazine's fifth annual list of influential people hit newsstands on Friday, with categories including "Leaders & Revolutionaries" and "Heroes & Pioneers".
Lombardi noted that Ecumenical Patriarch Bartholomew, the spiritual leader of Orthodox Christians, was applauded in Time Magazine for his leadership on the environment.
The Dalai Lama was praised for remaining hopeful in his independence struggle for Tibet.
"It's difficult to draw similarities and rankings with characteristics that are so diverse," Lombardi said.
Pope John Paul II was named Time's Man of the Year in 1994 for his qualities as a world statesman.
Chinese President Hu Jintao, the head of India's ruling Congress Party, Sonia Gandhi, New York Mayor Michael Bloomberg and media magnate Rupert Murdoch featured in Time's latest list.