The tree lighting will take place at 7 p.m. today at the JMC Wallace parking deck on Rosemary Street.
Robert Humphreys, executive director of the Downtown Commission, said the tradition started about 10 or 15 years ago. This year, a tree was bought and lifted onto the deck with a crane.
"We decided that it would be neat to have school choruses and school musical groups come out and sing songs," he said. "It's a community celebration."
The parade will begin at 10 a.m. Saturday, its route running from the post office on Franklin Street to Carrboro Town Hall. It is sponsored by the Chamber of Commerce and The Chapel Hill News.
Humphreys said that this year the parade will have nearly 3,000 participants and will include 125 to 130 units.
"They'll be 10 professionally built floats sponsored by various businesses in the community," Humphreys said. "And then there will be hand-built floats by club organizations, scout groups and church day-cares."
There also will be performances from school bands including Chapel Hill High School, East Chapel Hill High School, Hillside High School in Durham and Grey Culbreth Middle School.
Every year, the committee that organizes the parade selects a grand marshal to lead the parade based on work and good deeds performed in the community.
This year, the committee chose Irene Briggaman, a well-known volunteer in the Chapel Hill area.