In an emotional outdoor service on a packed, 400,000- capacity esplanade at the Sanctuary of Our Lady of Fatima, Catholic worshippers from all over the world sang and looked on, some crying, while many more watched the canonisation on giant screens from adjacent streets.
"We declare the blissful Francisco Marto and Jacinta Marto saints," the Argentine pontiff said in front of the white basilica where the siblings are buried, two giant portraits of the little shepherds hanging in the background.
The Virgin Mary is said to have appeared six times between May and October 1917 to Jacinta, then 7, Francisco, 9 and their cousin Lucia, 10.
She apparently shared three prophesies with the trio at a period marked by the ravages of World War I, which the Church believes included a vision of hell and a warning of a second major conflict.
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Pope Benedict XVI later gave an updated interpretation of this third prophesy, saying it could include the suffering of the Church following sexual abuse scandals that shook the Vatican.
Francisco died in 1919 and his sister Jacinta the following year in the Spanish Influenza epidemic that swept through Europe at the end of the war.
Their cousin Lucia lived on until 2005, becoming a nun and meeting several popes.
Pope John Paul II was possibly the most devoted to Fatima, attributing his narrow escape from death to the intervention of the Virgin Mary.
He beatified Jacinta and Francisco in 2000 -- the final step before sainthood.
The siblings were canonised after the Church officially attributed two miracles to the pair -- a necessary step to become a saint.
Wheelchair-bound Maria Emilia Santos said she regained the ability to walk on February 20, 1989, the anniversary of Jacinta's death, after praying to her.
And the parents of a Brazilian boy say he healed at lightning speed after falling more than six metres from a window in 2013, after they prayed to Jacinta and Francisco.
"They're our little shepherds, it means everything to us," said Luisa Pacheco, a 48-year-old seamstress from the northern region of Porto who spent the night in her car to see the ceremony.
Pope Francis himself -- on the second day of a pilgrimage to Fatima -- described the place as a "mantle of light that protects us here as in almost no other place on earth." But he stressed this was "according to the belief and experience of many pilgrims, if not of all.