Irene Stefani was an Italian member of the Consolata Missionary Sisters who helped the wounded in Kenya and Tanzania during World War I before shed died of the plague in 1930.
A trained nurse, she was much loved by the people of the Nyeri district, who called her "Nyaatha", or "Mother of All Mercy" in the Kikuyu language.
The streets of Nyeri were packed for the Roman Catholic beatification ceremony in the town, some 150 kilometres north of the capital Nairobi.
Thousands had also held a night vigil that began on Friday afternoon.
Stefani, who was born in 1891 near Brescia in Italy and was 39 when she died in Kenya.
Roman Catholics say she performed a miracle after her death, in 1989 when people fleeing Mozambique's 1977-1992 civil war prayed in her name.
Running from rebel battles, the faithful sheltered in a church at Nipepe, in Mozambique's northern Niassa region, and said that their prayer to Stefani caused the water in the church font to flow, keeping the thirsty alive.
Relatives of Stefani travelled from Italy for the ceremony.
"I am very happy to be here, the hospitality of the Nyeri people is great," Giovanni Zecchini, 51, whose grandmother was Stefani's sister, told The Standard newspaper.
Over a thousand police officers have been deployed to provide security at the ceremony, held at a university compound in the highland town.
On Sunday, her remains will be transferred to the cathedral in Nyeri.
President Uhuru Kenyatta praised her "selfless service to ordinary Kenyans", saying that "her compassion knew no bounds of race or class, and she spared nothing of herself," a statement read.
In the Friday night vigil, 95-year old John Mbuthia recalled how the nun "held his palm and prophesied to him that he would live long," the Nation newspaper reported.
"On one of Nyaatha's visits to our home, she stretched out her arm and held my palm, she looked at it and told me I would live long," Mbuthi said, called Stefani by her Kenyan name. "True to her words I am still alive, she is a true prophetess."
Newspapers in Kenya on Saturday displayed the nun's face on their front pages. After beatification she will be known as "Blessed Irene."
"The making of a saint," the Nation newspaper's headline read.