During his visit to the historic temple, where Gautam Buddha was born, he was accompanied by his Nepalese counterpart Sher Bahadur Deuba.
The Prime Minister's Office of India tweeted, "Beginning the Nepal tour with prayers at the ancient Maya Devi Temple, Lumbini."
"On the auspicious day of Buddha Purnima," Nepal's Ministry of Foreign Affairs wrote on Twitter, "both Prime Ministers performed pooja and prayers at the sacred Mayadevi temple in Lumbini, the birthplace of Gautam Buddha."
PM Modi is visiting Lumbini for a day on the festival of Buddha Purnima, and is in the Himalayan nation at Deuba's invitation.
"I've arrived in Nepal. On the auspicious day of Buddha Purnima, I am delighted to be with Nepal's great people.
Looking forward to the Lumbini programmes, "Prime Minister Modi announced his arrival on Twitter.
In Lumbini, he was met by Prime Minister Deuba.
PM Modi tweeted, "I would like to thank PM @SherBDeuba for the warm welcome at Lumbini."
The prime minister's visit to Nepal is his fifth since 2014.
PM Modi and his entourage flew in from Kushinagar, Uttar Pradesh, aboard a special Indian Air Force helicopter.
Lumbini, in the Terai plains of southern Nepal, is one of Buddhism's holiest sites since it is where Lord Buddha was born.
During his visit, he will deliver a speech at the Lumbini Development Trust's Buddha Jayanti celebrations.
The visiting Prime Minister will also take part in the laying of the foundation for a Buddhist Culture and Heritage Centre within the Lumbini Monastic Zone
