The 3.1 per cent increase on 2016 was driven by larger and fuller aircraft, the west London hub said.
Gatwick attributes the boost to continued growth in its long-haul connections, with new routes to Singapore, Rwanda, Seattle and Denver opening in 2017.
The growth comes despite the airport's seventh biggest airline, Monarch, entering administration in October.
London Stansted Airport also recorded its busiest ever year as it welcomed 25.9 million passengers in 2017, an increase of +6.5% year-on-year (1.57 million more passengers).
At the end of 2017, Emirates announced a new direct service from Stansted to Dubai in June 2018. North America is the second largest market for the London airport, with 17.35 million passengers.
The airport's Asia routes also continued their significant growth with Hong Kong +62 per cent and Tianjin +41.7 per cent in December.
MAG as a whole grew 7.3 per cent year on year on a "like for like" basis, excluding figures for Bournemouth Airport which was sold in December 2017.
A total of 27.8 million passengers travelled through the airport's three terminals during the last calendar year, up by 8.5 per cent year on year. In December 2017, traffic was up +1.5% year-on-year to 1.8 million.
"The a year ago has been a very busy and exciting time at London Stansted with passenger numbers and the range of destinations directly available from the airport both reaching all-time highs", said London Stansted Airport CEO Ken O'Toole.
As the United Kingdom prepares to exit the European Union, Heathrow CEO John Holland-Kaye said the recorded customer tally shows the airport is "helping to strengthen the British economy as the country seeks to redefine its role in the world".
"We're looking forward to continuing to deliver for Britain in 2018 as we progress our expansion plans".
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