The traditional festival in Mexico known for its colorful papel picado decorations is Día de los Muertos, or Day of the Dead. This vibrant celebration honors deceased loved ones, where families create altars adorned with the intricate papel picado, a traditional decorative art form made from paper. The festival takes place on November 1st and 2nd and includes offerings in memory of the departed. The papel picado symbolizes the connection between the living and the dead, adding a festive and beautiful touch to the celebrations while representing cultural values of remembrance and love.