The Urdd Eisteddfod, one of Europe's biggest youth festivals, is hosting its first full day in Swansea.
Organisers expect around 100,000 visitors over the week with around 15,000 people taking part in competitions.
The 2011 event is being held on the site of the former steelworks at Felindre.
It comes as thousands of football fans watch the city's home team in the Championship play-off final at Wembley.
The opening concert on Sunday evening included BBC One Show presenter Alex Jones, singer Cerys Matthews, who grew up in the city and teenager Shaheen Jafargholi, who was discovered on ITV's Britain's Got Talent.
Swansea last hosted the event eight years ago, when the festival was held in south Wales for the first time.
Fundraisers had initiially said they were struggling to raise money for this year's event in Swansea, blaming the fact that the youth festival was being held on the same site as the 2006 National Eisteddfod.
But they have now raised over £120,000.
Chief executive Efa Griffiths Jones told BBC Radio Wales that more people had taken part in the festival's regional competitions than ever before.
She said: "It's a difficult time for everyone. We've had to make some cutbacks to the eisteddfod this year but hopefully nothing that anyone who comes to the maes will see."
The first full day of the festival coincides with Swansea City playing Reading for a place in the Premier League at Wembley.
Ms Jones added: "We're very excited that we're in Swansea on this special day for Swansea."
The festival runs until 4 June.