Festival director Bernadette Berry said a lot of children who had grown up with the festival and loved it, were now returning as adults to help out or share their talents on stage.
"It is just fantastic seeing the new generation coming through."
Ms Berry first attended the festival about 30 years ago and has been organising it for about the past 10 years.
The festival almost died about 10 years ago, when the popularity of the New Year's Eve barn dance started causing security problems and it had to be scaled right back.
It was now growing again every year, she said.
A lot of people think the festival is "just a bunch of old hippies smoking and drinking", but it is not like that and never has been.
"It is very much a family affair.
"I have tried to extend the style of music [we have]. As far as I'm concerned if it's acoustic, it fits.
"I enjoy extending people's knowledge of music and trying to get out to the public that folk music doesn't mean old English music."
Last year, there had been a strong influence of Scandinavian music, while this year there was a bit of a Scottish and American theme, she said.
The festival is run by volunteers and seeing people enjoying themselves has kept her coming back every year, Ms Berry said.
The Whare Flat Folk Festival runs until January 2 at the Waiora Scout Camp at Whare Flat, near Dunedin.
Day visitors are welcome.
