Christmas wasn't celebrated by the early church until the fourth century. In the fourth century, the church decided to try to redeem a Roman pagan winter solstice festival: the festival of Saturnalia. This December holiday was considered the "birthday of the unconquered sun." Romans danced in the streets with gifts under their arms and greenery atop their heads.

Based on Biblical evidence Jesus of Nazareth was probably born in the fall near the Jewish feast of Tabernacles or in the spring around the time of Passover. Sometime before 336 the Church in Rome, unable to stamp out the pagan festival of Saturnalia, spiritualized it as the "Feast of the Nativity of the Sun of Righteousness." December 25th was chosen for the celebration of his birth by Pope Julius I. The practice was adopted by the Christian church in Antioch around 374. By 380 it was being observed in Constantinople, and by 430 in Alexandria. (The New International Dictionary of the Christian Church, p. 223.)

Germanic tribes of Northern Europe also celebrated mid-winter with feasting, drinking, religious rituals and the lighting of the yule log. During the Middle Ages, Catholic priests sought connections between biblical teachings and pagan traditions - believing that a
convergence of customs would lead more individuals to Christianity. The
celebration of Jesus' birth was melded into other age-old practices and became
known as the "Christ mass." Firelight represented the light of
Christ. Gift giving was linked to the presents of the wise men. Trees were decorated with apples associated with the biblical Garden of Eden.

an excerpt from A History of Christmas Celebration