On May 25th 1925, the twenty-four new carbon arc illumination lights which were mounted on the Ontario Power Company surge tank in Queen Victoria Park were lit for the first time. These lights produced the power of 1,320,000,000 candles. A Festival of Lights celebration was planned to coincide with the official dedication of this light system. The official ceremony took place on June 8th 1925 and was held to celebrate the first permanent night illumination of the Horseshoe Falls and the American Falls. Following this ceremony, the lights were turned on to illuminate the Falls with many thousands of spectators looking on. The light parade and illumination of the Falls became the predecessor of the current Festival of Lights.

Because of the success of the first festival, a second festival followed in 1926. It was known as the Festival of Lights. The Canadian Festival of Lights in Niagara Falls, Ontario premiered between November 17th 1983 and February 26th 1984. In March of 1985, the City of Niagara Falls (Ontario) changed the name of their event from the Festival of Lights to the Winter Festival of Lights in order to accentuate the winter theme.

Today, the Winter Festival of Lights continues to evolve. In addition to the nightly illumination of the Falls of Niagara, many hundreds of street and park light displays containing tens of thousands of lights abound on both sides of the border. It has grown each year with added attractions, concerts and dazzlingly beautiful light displays which now rival the illumination of the Falls themselves as the premier tourist attraction. In the summer of 2001, the City of Niagara Falls, New York announced the end of their Festival of Lights citing financial difficulties.