Modi wore Buddhist traditional red dress and carried out rituals both according to the Hindu and Buddhist tradition.
Modi will also offer prayers at Pashupatinath temple after his return from Muktinath today. This will be followed by meeting with leaders of political parties of Nepal.
He is scheduled to attend a civic reception hosted by Kathmandu Metropolitan City at Rastriya Sabha Griha before returning to New Delhi.
High security alert has been maintained in Mustang in view of Modi's visit. The local administration had put in place a special security plan to make Modi's visit safe and systematic.
Muktinath Temple is regarded as sacred place for both Hindus and Buddhists located in Muktinath Valley. The temple at an altitude of 3,710 metres at the foot of the Thorong La pass in mountainous Mustang district.