She was invited to Birmingham by the city's Roman Catholic Archbishop, the Most Rev Maurice Couve de Murville, to minister to the poor and to help the increasing numbers of homeless.
She was met by about 90 cheering well-wishers at St Chad's Cathedral. She told Peter Pargeter, the bishop who met her: 'Silver and gold I have not to give you, but I am sending my sisters.'
Mother Teresa, 82, viewed five properties. 'Some of them are too big, we would get lost in them; we are only small people,' she said.
Sir Richard Knowles, leader of Birmingham City Council, said: 'Mother Teresa can bring to Birmingham what local authorities can't - love, prayer and charity.'
Council chiefs say they may be willing to discuss 'the possibility of one of the council blocks of flats being rehabilitated and used by homeless families' and run by her order.
Mother Teresa had a 30-minute meeting with Cardinal Basil Hume, attending a conference in the city.
Tomorrow she travels to Rome on her way to India.