It falls on the 5th of the Jewish lunar month Iyar, celebrating the declaration of the state of Israel by David Ben-Gurion in Tel Aviv on May 14, 1948, and the end of the British Mandate of Palestine.

It is always preceded by Yom Hazikaron, the Israel fallen soldiers Remembrance Day on the 4th of Iyar (pronounced "eeyahr").

An official ceremony is held every year on Mount Herzl on the eve of Yom Ha'atzmaut. The ceremony includes a speech by the speaker of the Knesset (the Israeli Parliament), a dramatic presentation, a ritual march of soldiers carrying the Flag of Israel, forming elaborate structures (such as a Menorah, Magen David and a number which represents the age of Israel) and the lighting of twelve beacons (one for each of the Tribes of Israel). Every year a dozen Israeli citizens, who made a significant contribution in a selected area, are invited to light the beacons.  In 2004, the law was changed to include if the 5th of Iyar falls on Monday, the festival is postponed to Tuesday Iyar 6, so that Yom Hazikaron will not be immediately after the sabbath.

The specific ritual involved in observance of this day is a matter of development.

The Chief Rabbinate along with many other religious authorities have declared that Yom Ha'atzmaut is one of the Jewish holidays in which Hallel should be said.

The Religious Zionist movement has created a liturgy for the holiday, which sometimes includes the recitation of some psalms and the reading of a portion of the Prophets (Haftarah) on the holiday morning. Some segmants of the Religious Zionist camp have promoted the inclusion of a version of Al Hanisim (for the Miracles...) such as those under the guidance of Rav David Bar Hayim of Machon Shilo.

Other changes to the daily prayers include reciting Hallel, reading the Torah, saying the expanded Pesukei D'Zimrah of Shabbat (the same practice that is observed almost universally on Hoshanah Rabbah), and/or blowing the Shofar.

Most Hasidim and Haredim make no changes to the usual daily prayers.

Some anti-Zionist Jews display a black flag and wear ashes and sackcloth as a sign of mourning. Members of the Satmar, Toldos Aaron, Toldos Avraham Yitzchak, Munkatch, and Vizhnitz-Monsey Chasidic sects fast to atone for what they view as the sin of having created the State of Israel.

The Conservative Movement instituted the reading of a Torah portion for the day as well as the inclusion of a version of Al Hanisim (for the Miracles...), which is commonly recited on Hanukkah and Purim.

The Reform Movement suggests the inclusion of Ya'leh V'yavo. An addition to the Amidah that is also included on Rosh Chodesh (the New Month), Shalosh Regalim (the Pilgrimage Festivals), Rosh Hashanah, and Yom Kippur.

Some Arab citizens of Israel celebrate Yom Ha'atzmaut just like their Jewish counterparts; especially Arabs from Druze, Christian or Beduin descent. However for most Arab citizens the day represents a sense of lost national identity and in fact it is called in Arabic HaNakba (the disaster).