In Chandigarh, the Sector 19 Cathedral and other churches were beautifully decorated with hundreds of people joining in singing of Christmas carols and offering prayers since Monday evening.
Reports of celebrations also came in from Amritsar, Batala, Ludhiana, Jalandhar, Hoshiarpur, Patiala and Bathinda, among other places.
Shops and markets were decorated at most places and people could be seen doing brisk shopping for the festival.
"The business has been good this time. People have been making purchases linked to Christmas for the past week," Vijay Kumar, a card and gifts shop owner in Ludhiana, said.
People offered prayers in churches in Ambala, Hisar, Panipat and other places in neighbouring Haryana.
The police made tight security arrangements around most churches in Punjab in view of recent terror-related incidents in the state.