Hot-air balloon festival is held one week before the full-moon day of Tazaungmone. This festival is very well-known as one of the most famous festival in country.During the festival, giant hot air balloons of various colors and shapes are sent up to the sky. Young people of Taunggyi of crazy about competing in the festival.

Teams from various towns and villages make balloons out of cloth and paper in the shape of birds or animals for the daytime competitions,  and those decorated with tails of small paper lanterns for night. Before setting them off, the teams carry their balloon around town to show off with dance and music. On the night of the full-moon the townsfolk parade around town carrying lanterns and offerings to be placed at the pagoda.

Also known as Tazaungdaing Fire Balloon Festival, the daytime competitions are for balloons made in animal or bird shapes and at night fire balloons are decorated with strings of lanterns or designs made of lights. The balloons have a bamboo frame over which hand-made paper is glued. The hot air is generated by burning rags under the opening. Balloons are judged for size, style, design and the time they remain aloft. On the night of the full-moon Taunggyi townsfolk hold a parade around  the town carrying colorful lanterns.