President Obama on Tuesday bestowed the Medal of Honor on an soldier from Santa Fe who saved the lives of his fellow troops in Afghanistan by grabbing a grenade and throwing it back at his attackers -- an act of valor that cost him his right hand.

Army Sgt. 1st Class Leroy Petry becomes only the second living veteran of the wars in Iraq and Afghanistan to receive the military's highest honor.

"This is the stuff of which heroes are made," Obama said at a White House ceremony, expressing the "gratitude of our entire nation" for Petry's actions.

"Today we honor a singular act of gallantry," the president said. "What compels such courage? What leads a person to risk everything so that others might live?"

The president credited Petry with savings the lives of two Army Rangers with his "selfless act."

On the afternoon of May 26, 2008, then-Staff Sgt. Petry was the senior non-commissioned officer on site in Paktia province, about 60 miles south of Kabul, as the 75th Ranger Regiment conducted a daytime helicopter assault on a set of buildings thought to house a dozen or more terrorists. Petry did not have to be present for the raid with his fellow soldiers but had decided to go anyway.

Petry and Pfc. Lucas Robinson were moving from an inner courtyard area to an outer one when two attackers, armed with AK-47 assault rifles, opened fire. Robinson was hit. A separate round struck Petry and penetrated each of his legs.

At that point, the two struggled to take cover behind a chicken coop situated to the northwest of the targeted building. A third man, Sgt. Daniel Higgins, ran to join them, while the wounded Petry managed to lob a grenade at their attackers.

A fourth American soldier, 21-year-old Spc. Christopher Gathercole of California, suffered a fatal gunshot wound to the head during the operation.

Pinned down behind the chicken coop and awaiting help, Petry, Robinson and Higgins saw a grenade land on the ground. Petry, wounded in both legs, didn't waver -- he grabbed the grenade with his right hand and threw it back at the enemy. But it detonated just as he let go and obliterated his right hand on the spot.

Still, the act of valor had saved his life and those of his comrades. All of the terrorists on the scene were killed by U.S. forces, and all of the American survivors of the battle credited Petry with saving their lives.

Robinson and Higgins both have since left the Army to attend college. Petry remains in the service, and his fellow Rangers said he plans to continue his career in an Army uniform. The married father of four has taken part in 5-kilometer races and walked in a 20-mile march for his old unit.

FoxNews.com's Judson Berger and Fox News' James Rosen contributed to this report.