Divisions between the two major parties in the US were on display as Trump hailed an "American comeback" in the chamber where he had recently been impeached.
Speaker of the House Nancy Pelosi, the opposition lawmaker who brought impeachment charges against Trump, ripped up his speech behind his back after he finished.
Pelosi called the address a "manifesto of mistruths" in a statement released after the address.
"This speech was about American heroes and American workers. She decided THAT was worth literally tearing apart," Republican representative and minority whip Steve Scalise tweeted, adding that it was "absolutely disgraceful".
Trump claimed in his speech that his administration had "shattered the mentality of American decline" and touted the success of his administration.
Guests are often invited to attend the State of the Union address, an annual speech to the joint houses of Congress, whose stories highlight issues the administration is working on.
One of Trump's guests was Venezuela opposition leader Juan Guaido who received a standing ovation from both parties.
But several moments of Trump's speech included what many observers have been calling "made for TV moments" including a military family reunion with a soldier returning from Afghanistan to see his wife and children.
Trump also gave the nation's highest honour, the Presidential Medal of Freedom, to conservative radio host Rush Limbaugh who was sitting next to First Lady Melania Trump during the speech.
He also hit out at the opposition party, stating that he wanted to protect private insurance and adding: "we will never let socialism destroy American healthcare."
Trump gave the State of the Union in an election year and at one point Republicans chanted "four more years" repeatedly in the chamber.
The US president never mentioned the ongoing impeachment proceedings against him.
Some Democratic members of congress skipped the speech on Monday with Representative Alexandria Ocasio-Cortez tweeting that she would not use her presence to "normalize Trump's lawless conduct & subversion of the constitution".
Other members of Congress said they had walked out of the speech, with Representative Tim Ryan from Ohio calling it "fake" and Representative Rashida Tlaib of Michigan calling him out for "lies" that are "beneath the dignity of the office he occupies".