Celebrating gay, lesbian, bisexual and transgender pride in a rural setting, ChillOut has been a fixture on the local calendar for more than 13 years.

This year's festival runs for four days over the long weekend from Friday to Monday, with events in and around Daylesford including music, cabaret, cinema under the stars, arts and crafts, sports events and dances.

"ChillOut is about celebrating inclusiveness and showing that queer people are everywhere, not just in the big cities," said ChillOut president Adam Wright.

"Many of our events are family-friendly and everyone gay, straight or in-between is welcome to join in."

The annual festival attracts tens of thousands of visitors to Daylesford and surrounding areas, and has been estimated to pump more than $8 million into the local economy.

A key element of the festival is fundraising for a nominated worthy cause, with this year's festival benefiting the CFA/Glenlyon Group, incorporating several local CFA brigades.

"Like everyone in Victoria, we were devastated by the destruction and loss of life of last year's terrible bushfires," Mr Wright said.

"The choice of worthy cause this year was a natural one. We wanted to do what we could to support local firefighters. Last year we raised over $20,000 for Buddies for Wildlife, and this year we're hoping to raise even more."

The festival is supported by the Hepburn Shire Council.

"ChillOut is a part of what makes Daylesford and the Hepburn Shire so special," said Cr Janine Booth, mayor of Hepburn Shire.

"The huge array of festival events make Daylesford the best place to be this long weekend."

A colourful street parade and all-day outdoor carnival are the centrepieces of the weekend's events, taking over Daylesford's main street from 10am on Sunday, March 7, then moving to Victoria Park from 11:30am.

"These are family-friendly events," Wright said.

"We dont set out to shock or scandalise, just to be ourselves and have a weekend of fun and celebration."

The Carnival Day will have entertainment headed up by ARIA-winning singer-songwriter Deborah Conway, food and drink, stalls celebrating local produce and queer causes, roving performers and lots of great atmosphere.

The street parade is free, entry to the carnival is $18 ($15 concession, under-15s free when accompanied by a parent or guardian). Full details of the festival program can be found at the website chilloutfestival.com.au