The festival honors Chang’e and the moon in this yearly event.
The legend is that Chang’e married to Houyi and they were both immortals. The Jade Emperor had 10 sons who had turned themselves into suns and were scorching the earth. The Emperor could not talk to his sons to stop them so Houyi, a fine archer was asked to solve the problem. His solution was to shot all but one of the suns down. The Jade Emperor was not pleased that 9 of his sons had been killed and he banished Chang’e and Houyi to live on earth as mere mortals.
Chang’e was greatly upset that she was longer immortal and her husband went to get a pill from the Queen Mother of the West that would restore immortality. The Queen warned Houyi that only half of the pill was needed per person. Houyi placed the box with the pill in his home, told Chang’e not to look in the box and left on a hunting trip. When he returned he found that his wife had eaten the entire pill and floated up to heaven as an immortal.
On the moon she was lonely for her husband but a jade rabbit who mixed elixir’s was there as was a wood cutter named Wu Gang who’s attempts to become immortal had so angered the gods that he was banished to the moon. His only release was through cutting down a tree that grew on the moon. However as soon as he cut down the tree it sprang right back up.