Sean Brady has been made a cardinal by Pope Benedict in a ceremony at St Peter's Basilica in Rome.
The 68-year-old Cavan man received the red skull cap and beretta from the German Pope.
President McAleese led an Irish civic delegation which watched as the Archbishop of Armagh received his zucchetto and beretta.
She said she thought the elevation of Cardinal Brady will help to optimise the good mood surrounding the peace process in Ireland.
She described the decision to have three Irish residential cardinals as a remarkable testament to the faith of the Irish people and to their church leadership.
Deputy First Minister Martin McGuinness, represented the Northern Ireland power sharing administration.
Cardinal Sean Brady has said he has been encouraged by messages of support he has received from loyalists.
Dr Brady said the messages were one reason why he had great hope for the future of Ireland.
Pope Benedict assigned him the titular church of San Quirico e Giuglietta as a symbol of the new cardinal's role in helping the pontiff to minister to the diocese of Rome.
Also prominent at the ceremony were cardinals Cathal Daly and Desmond Connell.
Cardinal Brady makes history by joining them in becoming Ireland's third residential cardinal.
