More than 4,000 pilgrims packed the "church of the baptism", west of the Jordanian capital Amman and near the Dead Sea.
Before the ceremony started, dozens of priests walked to the river and filled jugs with water as scouts played traditional music.
The priests were led by Archbishop Pierbattista Pizzaballa, apostolic administrator of the Latin Patriarch of Jerusalem.
More than 4,000 pilgrims packed the "church of the baptism", west of the Jordanian capital Amman and near the Dead Sea, an AFP photographer said.
During the ceremony the priests dipped their fingers in the water they drew from the Jordan River and used it to bless the congregation, emulating the baptism of Jesus.
"This is a religious and national holy day, the anniversary of the baptism of Jesus Christ," Archbishop Maroun Lahham, Patriarchal Vicar for Jordan, told the worshippers.
"We are holding our celebrations in a holy place, in the place from which Christianity was spread" to the world.
Wadi al-Kharrar, or Bethany Beyond the Jordan, is where biblical historians believe Jesus was baptised by his cousin, John the Baptist, and began his public ministry.
Pope John Paul II held a ceremony at Wadi al-Kharrar in 2000 that Jordanians took as confirmation that this was the original baptismal site.
Another site on the Israeli-occupied western bank of the Jordan River is also venerated.
The remains of several churches, baptismal pools and a sophisticated water reticulation system -- some dating to the Roman era -- have been discovered in Wadi al-Kharrar.
In 2015, UNESCO added the site to its World Heritage List.
Tens of thousands of pilgrims from around the world visit Wadi al-Kharrar and other sites in Jordan of interest to Christians each year.
Christians represent six percent of Jordan's mostly Muslim population of 9.5 million.