Video report by ITV News Political Correspondent Carl Dinnen
During a briefing at Downing Street, the prime minister said: "a smaller Christmas is going to be a safer Christmas and a shorter Christmas is a safer Christmas" as he laid out the new advice.
The easing of rules at Christmas, which will see three households allowed to mix for five days between December 23 and 27, is staying the same in Scotland, England and Northern Ireland.
But Wales announced it would be making its guidance to limit Christmas bubbles to two households into law.
Mr Johnson said people should have a "merry little Christmas - and I do mean little".
He said anyone planning to mix in the five days of relaxations should "reduce the number of people you are in contact with to the lowest possible number" in the five days before Christmas.
He also advised people planning to see families at Christmas to avoid travelling from "high prevalence" areas to those with lower Covid-19 case rates and not to stay overnight if possible.
A joint statement on advice for staying safe at Christmas has been published from the UK Government, Scottish Government, and Welsh Government.
The nations have said they "strongly recommend" people to spend Christmas with their own household or existing bubble.
It adds: "To protect you and your loved ones, we recommend that you think very carefully about the risks of forming a bubble."
More advice from the government includes:
The safest way to spend this Christmas is with your own household or your existing support bubble in your own home.
Take precautions to minimise risk by stopping unnecessary social contact outside your immediate household as soon as possible, and for at least five days before you meet other households in your bubble, and by working from home if you can.
If you do intend to form a bubble, you should keep the bubble small and your visits short - you should not stay overnight unless absolutely unavoidable.
If you are in an existing household or support bubble with someone who is clinically extremely vulnerable, think carefully.
If you live in an area with the highest alert, for example, tier 3 in England and level 4 in Scotland, you should avoid travelling to lower prevalence areas where possible.
If you form a Christmas bubble, practise safe behaviours: washing your hands, making space between members of different households wherever you can, and letting in fresh air.
Mr Johnson said: "Please think carefully about avoiding crowds in the Boxing Day sales and no one should be gathering in large groups to see in the New Year."
The PM added the "overall situation is alas worse, more challenging than we hoped when we first set the rules" for Christmas.
He also acknowledged Christmas is a time of "immense emotional and spiritual importance" but "also a moment for us to exercise extreme caution".
He said England is "already seeing worrying rises" of coronavirus in several parts of the country since lockdown was lifted at the start of the month.
However doctors have warned that relaxing coronavirus measures over Christmas will "without doubt cost lives" and have a "grave" impact on the NHS in the new year.
ITV News' Political Editor Robert Peston analyses the latest developments
BMA council chairman Dr Chaand Nagpaul said: "Relaxing the rules will, without doubt, cost lives and the impact on the NHS in the new year will be grave.
"For those reasons, as the voice of thousands of doctors, we urge people to think long and hard about how many people they share their Christmas with."
Meanwhile, Chief Medical Officer Chris Whitty said "just because you can do something doesn't mean it's sensible in any way" as he urged people to do as little socialising as possible at Christmas.
"You wouldn't, for example, drive at 70mph if there was a very icy road, even if the road might say 70mph is what you officially can drive at," he said.
In Wales, just two households will be allowed to meet rather than three and this will be made into law.
The country will start moving into stricter level 4 restrictions - the equivalent of a lockdown - from 6pm on Christmas Day.
While the law is staying the same in Scotland, First Minister Nicola Sturgeon recommended that those people forming a Christmas bubble should only meet up on one day and not stay overnight "unless it is unavoidable".
She said: "Firstly and unequivocally the safest way to spend Christmas this year for you and for those you love is to stay within your own household and your own home.
"My strong recommendation is this is what you should do if at all possible."
In Northern Ireland, First Minister Arlene Foster said the public must take "all and every precaution" at Christmas and proposals for further restrictions will be brought forward on Thursday.
There was chaos earlier after Mr Johnson said at Prime Minister's Questions there had been a unanimous agreement between all UK nations that the laws at Christmas would not change.
Minutes later First Minister Mark Drakeford announced the rules in Wales would be changing, causing confusion for those hoping to from England to Wales for Christmas.
He said: "Here in Wales, the position is that only two households should come together to form an exclusive Christmas bubble during the five-day period.
"The fewer people we mix with in our homes, the less chance we have of catching or spreading the virus."
The price of the relaxed restrictions will be a tougher lockdown in Wales from December 28.
Mr Johnson said it would be "frankly inhuman" to "ban Christmas" and he did not want to "criminalise people who made plans and simply want to spend time with their loved ones".
"When we say three households can meet on five days I want to stress these are maximums and not targets to aim for," he said.
"It's always going to be safest to minimise the number of people you meet. That means if you are visiting others over Christmas we're asking you in the five days beforehand, as early as this Friday, to reduce the number of people you are in contact with to the lowest possible.
"If possible don't travel from a high prevalence to a lower prevalence area and avoid staying away from home overnight if you can."
He added: "I want to be clear, we don't want to ban Christmas, to cancel it, I think that would be frankly inhuman and against the instincts of many people in this country. "
Watch the prime minister's press conference in full here: