Xi hailed the thought of the ruling Communist Party founder as "invaluable spiritual wealth" and will remain the party's guiding spirit.
Mao's thoughts contained in his Red Book which once resonated across the world and sparked Communist movements paled into insignificance after his death as it was overtaken by his successor Deng Xiaoping's widespread economic reforms, propelling China into the second largest economy next only to the US.
Deng's opaque Socialism with Chinese Characteristics gave wide room for the successive Chinese leaders to expand reforms including the introduction of private property, shunned by Mao.
The party theoreticians in recent years were also critical of some of Mao's political and economic campaigns, especially his disastrous Cultural Revolution (1966-76) in which thousands were killed in the name of purging capitalists and traditionalists.
The Communist Party of China (CPC) every 10 years observes Mao's birth anniversary.
Xi's speech this year was regarded as significant as he is the only CPC leader after Mao to continue in power for the third consecutive five-year term.
Like Mao, he also holds the title of core leader meaning that he was above the rest of the party leaders and widely expected to remain in power for life.
More From This Section
In an article this month commemorating Mao's legacy, Qiushi, a leading party theoretical journal of the CPC, also hailed what it called the country's "good fortune" to have Xi as the "core of the party and leader of the people again, the Hong Kong-based South China Morning Post newspaper reported.
Leading the celebrations, Xi addressed a symposium at the Great Hall of the People to commemorate in which he stressed the importance of pushing forward the cause pioneered by Comrade Mao Zedong and called for efforts to build China into a stronger country and rejuvenate the Chinese nation on all fronts by pursuing Chinese modernisation.
"Mao Zedong Thought is an invaluable spiritual wealth for our Party and will guide our action in the long term," Xi said, underscoring that the "best way to commemorate Comrade Mao Zedong is to continue to advance the cause pioneered by him".
Xi said that the life of Mao was one devoted to national prosperity, rejuvenation, and people's happiness.
Mao led the people in blazing a trail for adapting Marxism to the Chinese context, forging the great, glorious and correct CPC and founding the New China with the people being masters of the country, state-run Xinhua quoted him as saying.
Mao made indelible historic contributions to the Chinese nation and the Chinese people, which will go down in history, Xi said.
Asked for her comments on Mao's birth anniversary, Chinese Foreign Ministry spokesperson Mao Ning told a media briefing that Comrade Mao Zedong was at the core of the first generation of CPC central collective leadership and a great man deeply loved and respected by the whole Party and people of all ethnic groups in China.
"Across China, various forms of commemoration activities are held today, she said.