When making homemade Nativity costumes, it's best to consider both reality and perception. In truth, no one alive today can be sure what the Holy Family and others who were involved were wearing, but knowledge of the time period and Bible stories read and told for centuries have created certain ideas of what a Nativity scene should entail.
The Holy Family
Mary and Joseph likely were a bit scruffy from traveling for miles on dry, dusty roads. Most people don't want to perceive the couple looking that way, however. Mary often is depicted in white and light blue. Make a blue robe for her by draping a full width of woven fabric--usually 45 inches wide--over her from front to back. Cut a hole for her head and sew up the side seams to about waist level. Drape a yard or more of white fabric around her head and neck for a modest shawl and scarf. Dress Joseph in a tan robe made in the same manner as Mary's and belt it with a length of rope.
According to the Bible (Luke 2:12), the babe was wrapped in swaddling clothes. Swaddling consists of wrapping a baby snugly in strips of cloth or a blanket. If a doll is to portray the baby Jesus, strips of cloth could be used, but a blanket is more practical for a real baby. Use white fabric regardless of whether a blanket or cloth strips are used.
Shepherds should wear robes that have a rougher appearance. Choose nubby fabric in shades of brown. Striped fabric also is appropriate, but avoid anything having a fancy look.
The angel who appeared to the shepherds should be dressed in a white robe. Drape sheer chiffon fabric over the robe to give the angel's costume a filmy look and create the illusion of wings when his arms are lifted.
The three wise men who visited the manger should be dressed royally. Choose fine fabrics such as silk or satin. Deep purple and maroon convey a rich feeling. Drapery cord and tassels make belts that are several steps above the simple rope belts worn by Joseph and the shepherds.
Flat leather sandals are appropriate footwear for all adults. Any character other than the wise men also could go barefoot.
Loose-fitting sweatpants and hooded sweatshirts make an easy basis for animal costumes. Use white sweats for lambs and brown sweats for cattle. Felt ears and tails in the appropriate shapes can be pinned or sewn to the hoods and backsides of the sweats. Lambs' ears can flop down. Pointed cattle ears will stand upright when folded in half horizontally and tacked at the base.