Accompanied by French military officials, Macron on Friday laid a wreath at a monument to those who "died for France", in the mixed Christian-Jewish Saint Eugene cemetery which was the main burial ground in colonial times.
French soldiers sang the Marseillaise as cicadas buzzed in the background.
He later visited the Jewish part of the cemetery, accompanied by prominent French Jews.
Algerian President Abdelmadjid Tebboune had on Thursday hailed "promising prospects for improving the special partnership" between the two countries.
During their joint press conference on Thursday evening, Macron -- the first French president to be born since Algerian independence in 1962 -- said that "we didn't the choose the past, we inherited it".
"We must look at it and recognise it, but we have a responsibility to build our future for ourselves and our youth," he said.
Ties between Paris and Algiers have seen repeated crises over the years. They had been particularly tense since last year when Macron questioned Algeria's existence as a nation before the French occupation and accused the government of fomenting "hatred towards France."
Tebboune withdrew his country's ambassador in response and banned French military aircraft from its airspace.
But Macron's office said he "regretted" the misunderstandings caused by his comments, and his aides believe both sides have moved on, noting the resumption of normal diplomatic relations and overflights to French army bases in sub-Saharan Africa.
The French president announced Thursday evening that the two countries would set up a joint French-Algerian commission of historians to study archives on France's colonial rule in Algeria. This would include the devastating eight-year independence war which left hundreds of thousands, mostly Algerians, dead.
Analysts say Macron's visit comes as Algeria is seeking a bigger role in the region, buoyed by surging energy prices that have filled the coffers of Africa's top natural gas exporter.
Macron's office has said gas is not a major feature of the visit -- although the head of French energy firm Engie, Catherine MacGregor, is in Macron's delegation.
Algeria has helped Europe diversify its energy supplies by pumping more gas to Italy, French President Emmanuel Macron said Friday during a visit to Africa's top gas exporter.
Dismissing suggestions that Italy and France were "in competition" for Algerian gas, Macron welcomed a deal Algeria signed last month to pump more gas to Italy.
The deal is "good for Italy, it's good for Europe and it improves the diversification of Europe," he told reporters.
Last month, Italy's Eni, US major Occidental, France's Total and the Algerian group Sonatrach signed a $4 billion, 25-year oil and gas production-sharing contract that will provide Rome with "significant volumes of natural gas", Tebboune said at the time.
On Thursday Tebboune said he and Macron had discussed how to bring stability to Libya, the Sahel region and the disputed territory of Western Sahara.