Pope Benedict XVI is celebrating Mass, focusing on family values before tens of thousands of people in the Croatian capital, Zagreb.
Later, he will visit the tomb of a controversial wartime cardinal.
Upon arrival on Saturday, the Pope gave his backing to Croatia's bid to join the European Union.
He said he understood fears of a loss of cultural identity by joining the EU, but said Europe needed reminding of its Christian roots.
"From its beginning, your nation has belonged to Europe," he said as he arrived at the airport.
This is Pope Benedict's first visit to the staunchly Catholic nation and, despite some criticism at the $6m (£3.6m; 4m euros) cost of the two-day trip, he received a warm welcome.
After touching down in Zagreb, he met Croatian President Ivo Josipovic, before addressing a gathering of academics, cultural, business and diplomatic leaders.In the evening, he led a prayer vigil for some 25,000 young Croatians in Zagreb's main square.
Many chanted "Pope, we love you" during an hour and a half of prayers, songs and an address from Pope Benedict in which he urged them not to be led astray by "lifestyles which regard appearances as more important than inner depth".
As many as 400,000 people from across Croatia and neighbouring countries are expected to attend Sunday's mass inside Zagreb's hippodrome.
After the mass, Pope Benedict is due to pray at the tomb of Cardinal Alojzije Stepinac.
Stepinac is a hero to many Catholics in Croatia, who, they say, spoke out against the Nazi-backed regime during WWII and later refused to bow to the communist rulers of Yugoslavia.
But critics say he did not sufficiently condemn the persecution of Serbs and Jews by the Nazi rulers.
The late Pope John Paul II caused controversy when, during a visit to Croatia in 1998, he put Cardinal Stepinac on the road to sainthood.
Pope Benedict on Saturday praised the cardinal's "real humanism", but he did not say whether he would be proclaimed a saint.
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