The young siblings' visions of the Virgin Mary 100 years ago made the town one of the world's most important Catholic shrines.
Francis proclaimed Francisco and Jacinta Marto saints at the start of Mass today marking the centenary of their visions.
Hundreds of thousands of pilgrims applauded after the pope recited the rite declaring the Martos saints.
The siblings and their cousin, Lucia, reported that on March 13 1917 the Virgin Mary appeared to them while they grazed their sheep.
They said she confided in them three secrets - foretelling apocalyptic visions of hell, war, communism and the death of a pope - and urged them to pray for peace and a conversion away from sin.
He urged Catholics today to use the example of the Marto siblings and draw strength from God, even when adversity strikes.
"We can take as our examples Saint Francisco and Saint Jacinta, whom the Virgin Mary introduced into the immense ocean of God's light and taught to adore him," he said. "That was the source of their strength in overcoming opposition and suffering."
Before the Mass, Francis silently in the basilica overlooking the shrine's vast square at the tombs of each of the Fatima visionaries.
The Marto siblings died two years after the visions during Europe's Spanish flu pandemic. They are now the youngest ever saints who did not die as martyrs.
Earlier that day, Pope Francis privately met with Portuguese Prime Minister Antonio Costa.