Mukherjee, who reached the temple amid tight security, performed the pooja by lighting 'lakh batti' (100,000 wicks) and sprinkling 'Panchamrita' (a sacred mixture of five ingredients including milk, curd, honey, sugar and ghee).
He was welcomed by 108 Batuk (Hindu boys) chanting 'Swasti mantras' amid musical resonance of panchai baja and thime baja (traditional musical instruments) after entering through the main eastern gate of Pashupatinath Temple.
The temple, which is a UNESCO heritage site, is visited by thousands of Hindus from across the world.
Meanwhile, security has been tightened in the adjoining areas.
Mukherjee arrived for a three-day state-visit to Nepal yesterday at the invitation of President Bidya Devi Bhandari. He is the first Indian president to visit Nepal in 18 years.