Santa's Chimney Tradition

The tradition of Santa Claus entering dwellings through the chimney may reach back to the tale of Saint Nicholas tossing coins through a window, and, in a later version of the tale, tossing coins down a chimney when he finds the window locked. In Dutch artist Jan Steen's painting, The Feast of Saint Nicholas, adults and toddlers are glancing up a chimney with amazement on their faces while other children play with their toys. The hearth was held sacred in primitive belief as a source of beneficence, and popular belief had elves and fairies bringing gifts to the house through this portal. Santa's entrance into homes on Christmas Eve via the chimney was made part of American tradition through Moore's A Visit from Saint Nicholas where the author described him as an elf.

From Wikipedia