Christmas songs played in the City Hall Rotunda as toys were handed out to disadvantaged children whose families applied through the San Francisco Department of Child Support Services.
Some children feel today is their "dream day" because they get to leave school, firefighters' union President Tom O'Connor said.
For many, it is their first time coming to City Hall, said George Smith III, community outreach coordinator for the Department of Child Support Services.
"The kids feel like they're in the North Pole," Smith said.
A holiday tree adorned with white lights glowed as children eagerly checked their bags to see what toys they received.
The City Hall toy giveaway, which is now in its seventh year, is part of the San Francisco Firefighters Toy Program, which is expected to serve about 40,000 families this holiday season, O'Connor said.
Some of the toys collected are distributed to local fire stations, and firefighters then hand them out on the street in neighborhoods all over San Francisco on Christmas Eve and Christmas Day, O'Connor said.
Although the economy is said to be improving, there has been an increase in applications for the toy giveaway, O'Connor said.
Smith said that between 3,000 and 4,000 applications come in each year for the City Hall event but that only the first 1,100 are accepted.
Children whose applications were not accepted will attend a giveaway organized by the mayor's office later this month, Smith said.
The San Francisco Public Library also chipped in today, and each child was given an age-appropriate book in English, Spanish or Cantonese.
In addition to a toy and a book, children will also take home a candy cane and a plastic firefighters' hat, courtesy of the firefighters.
San Francisco Mayor Ed Lee also joined in today's festivities.
Toy donations were collected through bins set up at city offices throughout San Francisco, or were bought with monetary donations from companies including PG&E and Recology.