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The city is quite alive and only a few places close on Christmas Eve and/or Christmas Day, but there is still plenty to do.

The Christmas holiday season in Rome starts on December 8, which is the holiday of the Immaculate Conception and ends on January 6, the Epiphany (called the Befana in Italy).

Most of the major sites and monuments that have entry tickets, including the Colosseum, Forum, and Borghese Gallery, are closed on Christmas Day. They will, however, all be open on the 26th, despite that day also being a holiday.
The Vatican museums is closed on December 25, Christmas Day and December 26, St. Stephens (Santo Stefano).
The 26th of December is an excellent time to visit those opened sites. They will be virtually empty.

Most Rome restaurants are open normally throughout the holiday season but may close for Christmas Eve, sometimes Christmas day but many are open for Christmas day lunch, which is popular among Italians today.


So then, what CAN you do on Christmas day in Rome?

Walk around the city center, soaking up the lights and atmosphere, from via Veneto to via del Corso.

Head to Piazza Navona and enjoy the piazza's special look and feel this time of year. This is especially great if you have kids, as there are Christmas-y things to eat, a carousel, and lots of lights.

Take the bus to the Gianicolo hill and get a bird's eye view of Rome from there. There is another carousel here for kids, too.

Visit any number of churches and see the presepi, or Nativity Scenes.

Go to St. Peter's Square at the Vatican at noon, and watch the Pope give his Christmas Day Urbi et Orbi speech. The Pope appears at the loggia of St. Peter's Basilica and blesses the crowd. You don't need tickets but expect large crowds.

Have a big Roman Christmas lunch out at a restaurant. Make it last at least 3 hours, this is quite the Roman thing to do.