Huntingdon MP Jonathan Djanogly participated in a plaque unveiling commemorating the Cambridgeshire town's medieval synagogue and mikveh.
The ceremony was at a residential development, Muttongate, in the location researcher Mark Harris believes was once a centre of Jewish life.
Local mayor Councillor Daryl Brown was also involved in the ceremony and the 60 guests were addressed by Rabbi Reuven Leigh, director of Cambridge Chabad, who established what is thought to be the first mikveh in the city since medieval times.
"The plaque is a memorial to the need for toleration and for strong cultural links between the different peoples of our country," Mr Djanogly said.
Mr Harris added that it reflected "Jewish continuity, reconciliation, co-operation and friendship".