The Corsa dei Ceri - Gubbio
15th May annually.
A mad race up the slopes of Mt Inginio. A very famous event that draws a huge crowd.
Balestra - Gubbio May 25, San Sepolcro September 7. These two 
Umbrian and Tuscany towns (both very beautiful and ancient) have had an annual crossbow tournament since the 14th century. The crossbows are fearsome, massive things and the shooting takes place in a central piazza. It is all done in medieval costume and is proceeded by a cortege in period dress.
The Infiorata - Spello
2008 June
to commemorate Corpus Domini the streets of Spello are decorated with the most elaborate pictures made only from fresh flower petals. The designs are laid down through Saturday night ready for Sunday morning when the Priest leads a procession through the town over the floral displays. Park early.
Festival dei Due Mondi - Spoleto music festival
End of June, first weeks of July. Founded by Gian Carlo Menotti who was born in Italy but emigrated to USA. A long established and renowned cultural festival with performances of dance, poetry and music in the historic town of Spoleto. Needs booking ahead www.spoletofestival.it
Umbria Jazz - Perugia
2009 Jul 10-19
A vibrant and world class Jazz Festival increasing in popularity every year. In previous years James Brown and Miles Davis have been in the line-up.For these 9-10 days the nighttime streets are thronged with people. It is a very exciting time to visit the city whether you have a ticket for a particular perfomance or not. There are many free events.
www.umbriajazz.com
Preggio Music Festival
End of July, first two weeks of August.
For more than twenty years the medieval hilltop village of Preggio has held a festival. Including chamber music, choral, piano, organ and song recitals as well as a a highly recommended opera in August. Preggio sits high above the Niccone valley 15 minutes from Mercatale and 15 minutes from Umbertide. (We are sponsors of the Opera.)
Montone Film Festival July 2008
The Montone Film Festival is a very popular and successful film festival operating for one week every July. The setting is the small but beautiful medieval hilltop town of Montone. Many films are shown in the town's atmospheric piazza. The festival is a week of screenings, workshops and forums. It is attended by directors and actors including in previous years Colin Firth, Terry Gillam and Ralph Fiennes.www.umbriafilmfestival.com/english/home.htm
Donazione della Santa Spina 
also in Montone in the middle week of August. This is an elaborate pageant re-creating the gift of a thorn from the "crown of thorns" from the Republic of Venice to Fortebraccio, the founder of Montone in the fifteenth century. (It has a particular memory for us from the time David was plucked from the crowd to play the role of the Conte Carlo!)
Festa del Bosco : a celebration of truffles, funghi and other local foods and wine as well as local crafts.
Held at the beginning of November. Get there early if you want to park nearby.
http://www.youtube.com/watch?v=oQVMOycIWm0
Palio delle Barche, Passignano - July 27. On the face of it a most pointless race between the "quartieri" of the resort town by Lake Trasimeno. Teams of men in a kind of medievel costume, race 
into the lake in rowing boats, around a marker and then back to land where they pick up the boats and run to the top of the town. You have to see how Passignano is built into a formidable hillside to appreciate the effort involved. Then follows the main activity - carousing late into the night with lots of fireworks. Great fun but crowded.
Village festivals and Mercatale di Cortona village Festa
The majority of villages in this area hold annual summer festivals of varying sizes. A personal favourite is the Mercatale di Cortona festival generally a week long with cene (dinners) cooked and eaten in the village square every night. Dancing, small theatrical shows and dance troupes entertain the crowds. The festa's high point is on Ferragosto the national bank holiday on the 15th of August, when the midnight firework display gives a noisy close to the night.
Palio - Siena
August 16th annually- also in July. The famous Siena Palio. Lots of people want to see it but without a room with balcony overlooking the square or at least a booked seat it can be a hot and exhausting day.
Mad horse race around the central Campo and other medieval fun and games.