The Festival of American Folklife's first decade culminated with the Bicentennial Festival of American Folklife that took place for twelve weeks in the summer of 1976, from June 16 to September 6 (programs typically ran from Wednesday through Sunday each week). More than 5000 participants took part over the course of the summer. The 1976 Festival involved the participation of every region of the United States, 38 foreign governments, scores of American Indian tribes, and many labor organizations. Some 4.5 million people attended the Festival.

The Bicentennial Festival resulted from the collaboration of the Smithsonian with thousands of national and international scholars, community spokespeople, and cultural exemplars involved in the documentation, presentation, transmission, and conservation of cultural traditions. Preceding the Festival were several years of establishing cultural networks, training students, and providing opportunities for diverse peoples to interpret and present their traditions. The Bicentennial also saw the flowering of a touring program, begun in 1973, in which foreign groups at the Festival subsequently toured the United States. Scores of groups from the African Diaspora and Old Ways in the New World programs gave some 200 performances in 50 cities and towns across the U.S.

The 1976 Festival again took place in the western part of the National Mall to the south of the Reflecting Pool, between 17th and 23rd Streets. It was co-organized by the Smithsonian Institution, Division of Performing Arts (James R. Morris, Director; Richard Lusher, Deputy Director) and the National Park Service (Gary Everhardt, Director). Ralph Rinzler was Director of the Festival, and Bess Lomax Hawes and Robert Byington were Deputy Directors of the Festival. Tom Vennum served as Ethnomusicologist, and Frank Proschan as Archivist. The Bicentennial Festival was sponsored by American Airlines and General Foods.

The 1976 Festival again featured seven thematic programs, complemented by a Festival Stage. African Diaspora featured different countries every two weeks. The Festival Stage brought together participants from other areas and - for the last four weeks - its own dedicated performers. Native Americans changed focus by region every week; similarly, Old Ways in the New World changed focus by country every week. Regional America (June 16-August 8) changed focus by region every week, and Working Americans changed focus by theme every two weeks, with an expanded program on Transportation the last four weeks (August 11- September 6).