Lamu annually hosts the historic Maulidi festivities which have for more than a century been a permanent feature of East Africa's Islamic festivities. Maulidi or Maulid is the popular name given to Milad-un-Nabi an Islamic festival held during the third month of the Muslim calendar (Rabi ul Awwal) to celebrate the birth of the Prophet Mohammed. The Lamu Maulidi celebrations bring together thousands of Muslims from Kenya as well as other parts of East Africa, the Middle East, and other parts of the world.

Though it is a month-long celebration, the most important and observed time is sunset on the 11th of Rabi-al-Awal until dawn on the 12th. The Maulid is recited for that entire span of time, as it is on the actual date of the Prophet" 's birth according to Sunni Traditions. During the last week of the month of Rabi ul Awwal, in Lamu, there is a four-day long festival. This begins on Tuesday and ends on Friday. Since 1990, the National Museums of Kenya has sponsored the festival in Lamu. They organize various community-building competitions such as swimming, dhow races, henna competitions, tug-of-war, and donkey races.

Amidst the festival, in homes and in mosques, the people of Lamu recite one of four Maulids: Sharaful-Anam, Maulid ya Dibei (ya Rama), Baranzanji, and Simt-al-Durar (String of Pearls). These Maulids can best be described as religious poetry, based on the history and life of the Prophet, with lines and concepts from the Hadith and the Qur'an.

Muslims all over the world add their own variations and cultures to the recitation. Of all of the major cities and ports in this part of the world, East African Muslims choose Lamu to visit and observe this special time. The unique Swahili music, dance, and rituals here are unlike any others. Lamu is a town rich in culture, history, and traditions and will most likely continue to host the biggest Maulidi on the East African coast.

Festivities normally commence in the cool of the afternoon. The main religious celebrations take place in and around the Riyadha Mosque.

On the last day of Maulidi, the men of Lamu gather at the town cemetery and surround the town of Habib Swaleh. Following quiet prayers, groups of men and boys join together and begin a procession (Zefe) into town, holding hands and interlinking arms. The colorful, energetic procession winds along the seafront towards the centre of town, with the crowds reciting qasidas together.