As Katherine experienced growth in population industry and tourism the community was the potential to expand the Katherine Carnival into a regional festival of arts and culture. In 1991, the Fabulous Flying Fox Fesitval was founded by the Katherine Town Council's Arts and Cultural Advisory Committee, who still maintains its direction today.

The Flying Fox Art & Cultural Festival is named after the Red and Black Flying Foxes who roost in the trees along the Katherine River during the day and takes to the skies every night in search of food.

The Festival has come to traditionally embrace community events. The community comes together to enjoy a wide variety of arts and entertainment over a period of ten days. The events have included Mayoral Debutante Ball, Katherine Prize Art and Craft Acquisition Awards, exhibitions, workshop activities, Aboriginal culture, Family Fun Day, unique cross cultural experience of the Chinese Dragon Boat Races on the Katherine Gorge in Nitimluk National Park, Flying Fox Walk and Talk,' Main Event' including markets, car show, and plenty of entertainment.

In 2009 the Katherine Flying Fox Art & Cultural Festival celebrated it's new title, Katherine Festival.