Objectives. The primary goals of this study were to assess the propensity for alcohol sales to underage customers and obviously intoxicated customers at community festivals, and to assess the prevalence of alcohol control policies at these events. A secondary goal was to identify server and festival characteristics and festival policies related to the likelihood of illegal alcohol sales. Methods. We conducted pseudo-underage purchase attempts at 43 festivals and pseudo-intoxicated purchase attempts at 50 festivals to assess the likelihood of illegal sales. Research staff made observations at festivals and contacted festival planners by telephone following each event to assess which alcohol policies were implemented. We conducted backwards stepwise multivariate analyses for each purchase attempt outcome to identify policies and characteristics related to likelihood of illegal alcohol sales. Results. Pseudo-intoxicated buyers purchased beer in 89% of 95 attempts (standard deviation [SD]=0.31) and pseudo-underage buyers were able to purchase beer in 50% of 82 attempts (SD=0.50). All festival planners reported having at least two of the 10 alcohol policies we assessed, but no festival had implemented all 10 policies. Server characteristics were not related to either purchase attempt outcome. In the multivariate analyses, having more alcohol control policies was related to a greater likelihood of illegal sales to intoxicated customers; however, having more alcohol control policies was associated with a lesser likelihood of alcohol sales to underage customers. Restricting the number of servings per person was also associated with a lesser likelihood of alcohol sales to underage customers. Conclusions. Propensity for illegal alcohol sales at festivals is very high. Research is needed to identify interventions to prevent illegal alcohol sales at these events.