According to the Shi'ite belief, at the spring (khum) of al-Ghadir, the Prophet as his successor declared Ali bin Abu Talib and the festival commemorated this occasion. The fusion of religion which was characteristic of all religious festivals in Fatimid Egypt, is best exemplified by the festival of Eid al-Ghadir. The festival of Ghadir was celebrated with official sanction in Egypt for the first time in 362/973, when a group of people from Cairo, together with the North African troops (al-maghriba), gathered for invocations (du'a) on the 18th Dhu'l-Hijja, proclaiming that the Prophet had made Ali as his successor on the day of Ghadir al-Khum. It delighted Imam al-Muizz.

During the early centuries of Islamic history, the day of Ghadir Khum was well known and accepted as an auspicious occasion, and there are many indications that all Muslims participated in celebrating it. Ibn Khallikan describes the 18th Zil Hijja as the day of Ghadir Khum (1:60) and Masudi in al-Tanbih wa al-Ishraf (p. 31) mentions the night of the same day as the night of the festival of Ghadir Khum. Abu Rayhan al-Biruni, the famous Iranian scholar of the 5th century, includes the festival of Ghadir Khum among the festivals that the Muslim celebrated in his time (al-Athar al-Baqiyah, p. 334). The Shaf'i scholar Ibn Talhah writes, "The day of Ghadir Khum is a festive day and an historic occasion, for it was then that the Prophet clearly and explicitly nominated Ali as Imam and leader of the Muslims after him (cf. al-Ghadir, 1:267).

Over the course of the next century, this popular practice in Egypt was adopted as court ceremony. The Eid al-Ghadir was celebrated regularly during the period of Imam al-Aziz and Imam al-Hakim. Musabbihi (d. 420/1029) reports that the people gathered at the Azhar along with the Koran reciters (qurra), jurists (fuqaha) and singers (munshidun). They stayed for the noon prayer and then went to the palace, where portions (ja'iza) were distributed. In 415/1025, the people of Cairo followed their custom on the day of Ghadir al-Khum, put on fine clothes, and the munshidun went to the palace to offer invocations and poetry.