Beginning early in 1981, John W. Melton, administrator of the Gibson County General Hospital developed the idea of a "teapot festival;" to draw attention on the rare collection of Porcelain Veilleuses. His idea was favorably received by the city council. Melton served as the first Festival Chairman.
The festival has grown into a weeklong event beginning with a ceremonial Lighting of the Teapots and culminates in the Annual Grand Parade.