Light festivals have become key instruments in cultural and economic urban development, especially at the municipal level. This paper explores the evolution of light festivals in Portugal, through ethnographic research conducted from 2015 to 2023, focusing on festivals in Lisbon, Cascais, Lousada, Loulé and Aveiro. The study examines their roles in urban regeneration, tourism and cultural identity. Using participant observation, interviews and digital archival research, the research identifies the key phases in the growth of these festivals and contextualises their local impact. Findings highlight how these events contribute to the local economies, while fostering community engagement and influencing city branding. The discussion addresses the challenges of sustainability, commodification and political instrumentalisation of light festivals as tools for urban transformation.