Feliciano says he recorded the song while feeling homesick at Christmas, missing his family in New York and his extended family further afield as he sat in a studio in LA. He remembered celebrating Christmas Eve with his brothers, eating traditional Puerto Rican foods, drinking rum, and going caroling. "It was expressing the joy that I felt on Christmas and the fact that I felt very lonely. I missed my family, I missed Christmas carols with them. I missed the whole Christmas scene", he says.

This bilingual holiday classic comprises a simple English verse with a Spanish chorus, "Feliz Navidad, próspero año y felicidad" that translates as "Merry Christmas, a prosperous year and happiness." José Feliciano, told Billboard magazine: "If I had left in Spanish only, then I knew the English stations might not play it, so I decided to write an English lyric, 'I want to wish you a merry Christmas.' And then there was no way the stations could lock that song out of the programming."