Vasudeva could understand that the child was the Supreme Personality of Godhead, Narayana. Having concluded this without a doubt, he became fearless. Bowing down with folded hands, he offered prayers to the child, who illuminated His birthplace with His natural effulgence. Next Vasudeva's wife Devaki offered her prayers. 

The Lord, being very pleased by the prayers of His parents, responded, "O My dear mother and father, I appeared twice before as your son because I found no one else as highly elevated as you in simplicity and other good qualities. Both of you should constantly think of Me as your son, but you should always know that I am the Supreme Personality of Godhead. By thus thinking of Me constantly with love and affection, you will achieve the highest perfection: returning home, back to Godhead." 

After thus instructing His father and mother, the Supreme Personality of Godhead, Krishna, transformed Himself into a small human child.