Xi's visit, via high-speed rail, is his first to the city since 2017 and the first known trip outside mainland China in over two years amid the COVID-19 epidemic.
Xi, wearing a mask, stepped out of the train to be greeted by children and other people waving flowers and Chinese and Hong Kong flags, while chanting "Welcome, welcome, warmly welcome" in Mandarin.
Outgoing leader Carrie Lam and her husband were among those who welcomed Xi at the train station.
The city's streets had been festooned with red China flags and posters declaring a "new era" of stability.
Authorities deployed heavy security around the train station where Xi arrived and conducted stop-and-search checks, with some officers assisted by sniffer dogs.
Xi's official full schedule for the visit has not been released. Hong Kong's weather forecaster issued a typhoon warning late on Wednesday, but it was unclear if the celebrations would be impacted.
On his last visit to the global financial hub, Xi warned against any acts endangering China's sovereignty and said Hong Kong needed to enhance its national security regimen.
In 2019, millions of Hong Kongers protested against growing Chinese authoritarian rule, which later prompted Beijing to impose a sweeping national security law outlawing acts such as subversion with possible life imprisonment.
While tens of thousands of protesters had marched during Xi's visit five years ago, no protests are expected this year.
Lui Kam-ho, a senior policeman, warned this week against any "acts of violence or public disorder." The 30,000-plus police force said it will deploy all its resources to ensure security for the celebrations.
Police has closed parts of Hong Kong, blocking roads and enforcing a no-fly zone over the central Victoria Harbour.
Hong Kong's incoming leader Lee, a former policeman sanctioned by the United States for his role in the implementation of the national security law, is expected to be sworn in by Xi on Friday.
Xi, who is poised to secure a precedent-breaking third leadership term at a once-in-five-years Communist Party congress later this year, is expected to spend the night in neighbouring Shenzhen on Thursday and depart from Hong Kong on Friday.Â
