Comedian Conan O'Brien hosted the concert, which included musical stars Justin Bieber, Cee Lo Green, Jennifer Hudson, Victoria Justice and the Band Perry.
Obama made brief remarks to the crowd, saying the story of Jesus Christ changed the world by teaching basic values such as loving one another, helping and serving the less fortunate, forgiving, drawing closer to family, being grateful and keeping faith.
"Those are values that are shared by all faiths," Obama said. "So tonight let us all rededicate ourselves to each other, and in that spirit, from my family to yours: Happy holidays, Merry Christmas, God bless you all, and God bless the United States of America."
The concert of Christmas carols and songs- which took place at the National Building Museum- was hosted by comedian Conan O'Brien.
Other entertainers at the concert included the United States Naval Academy Glee Club, Washington Youth Choir, American Family Choir, United States Army Band Herald Trumpets, Ian Fraser and the Christmas in Washington Orchestra.
Before the concert, the Obamas greeted patients of the children's medical center dressed as elves and presented them with a basket of children's books. Obama playfully struggled to lift the basket and asked the elves to help him place it under a Christmas tree.
The concert will air Friday on TNT.
The Associated Press contributed to this report.