"Underneath the Tree" was first released to Adult Contemporary radio stations on November 5, 2013, by RCA Records as the album's lead single.

"Underneath the Tree" has been praised by music critics, who considered it the main highlight of Wrapped in Red and recognized its potential to be a holiday classic.

It has also charted within the top 20 in Belgium, the Czech Republic, Finland, Hungary, Ireland, Latvia, Luxembourg, Portugal, Singapore, and Slovakia.

[3] Greg Kurstin, whom she had previously collaborated with, was approached by Clarkson to produce the album; and together, they co-wrote the tracks "Underneath the Tree" and "4 Carats".

Billboard's Marisa Fox called it the album's "biggest surprise",[3] and described it as an optimistic tune that has Clarkson powering through Darlene Love-style vocals.

[12] In her review, Christina Vinson of Taste of Country remarked that the track "has everything a Christmas song could want: a jazzy, big band sound, saxophone and bells ringing, all bottled up in an optimistic and catchy holiday track" and said that Clarkson "shines", as her "strong vocals are needed to offset the snazzy production and chorus.

"[6] In his review, Idolator's Carl Williott wrote that the song "sounds instantly familiar—sleigh bells, laments about a lonely Christmas day, a sax solo—but with a tightly coiled hook and Clarkson's transcendent voice, the whole thing is kind of invigorating.

"[7] Sarah Rodman of The Boston Globe called it a bouncy, cooing number tailor-made to soundtrack sleigh rides, and named it the best track on the album.

[13] Critics also approvingly compared it to Mariah Carey's "All I Want for Christmas Is You" (1994), a track that RCA chief executive Peter Edge described as the song's inspiration.

"[15] Sal Cinquemani of Slant Magazine noted the similar themes of both songs, and that "Underneath the Tree" is likely to become Clarkson's very own contemporary standard.

[26] Internationally, "Underneath the Tree" charted in various countries, including Austria, Canada, Germany, Ireland, the Netherlands, and the United Kingdom.

[34] The lyric video was released to positive reviews, with Idolator's Sam Lansky describing it as "a nice visual accompaniment to the song that just lends an extra high-octane Yuletide cheer to its already-effervescent spirit".

[45] Brian Mansfield of USA Today reported that "Underneath the Tree" was American radio's most-played new holiday song of 2013.

[46] In a report published by ASCAP, "Underneath the Tree" was listed as the most-performed new and original holiday song in their repertoire in the years 2015, 2018, and 2019.

[51] In an interview on Vogue, Genius content director Elizabeth Milch referred to the song as "the most recent thing to make a play for the "All I Want" crown",[52] while The Washington Post writer Allison Stewart also described it as a close cousin to "All I Want for Christmas is You".

[56] In a 2019 data analysis by Quartz reporter Dan Kopf, he remarked that the song might be a successor to "All I Want for Christmas is You" based on its chart performance.