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They are also present at all national holidays such as the "Days of the Dead", the feast day of Our Lady of Guadalupe, Christmas, and Independence Day.

The Mexican art of paper-cutting is a marvelous synthesis of European, Asian, and Pre-Columbian artistic traditions.

When the Spaniards arrived in Mexico there was already a tradition of paper making that was called amatl in Nahuatl, the language of the Aztecs. The native peoples of Mexico produced a type of paper by mashing the pulp of the bark of fig and mulberry trees between rocks. Once dry the paper was then cut with knives made from obsidian. The paper cuts made from amatl were primarily of a ceremonial nature and included images of the numerous Aztec gods and goddesses, a practice that was discouraged by their Christian conquerors. Among the Spanish, the word amatl became amate. Today amate continues to be used in Mexico where one can occasionally find copies of codices and books as well as reproductions of the ancient deities.

Although the methods and tools have not changed much during the ages, papel picado continues to evolve as a living folk tradition in Mexico. Much of the papel picado available in today's folk art market comes from the village of San Salvador Huixcolotla, Puebla, which lies southeast of Mexico City. The tradition of paper-cutting is preserved in the talleres, small family workshops of two rival artisans' families, the Vivancos and the Rojas, who maintain a spirit of fierce competition and pride in the art.

The traditional process of making papel picado banners begins by drawing a design which becomes the patron or pattern. The pattern is then placed over multiple layers of tissue paper which rest on a thick layer of lead. The artisan then cuts through multiple layers of paper using a mallet to pound finely sharpened chisels of varying sizes and shapes through the paper and into the sheet of lead.

The process of transforming sheets of tissue from a design to a completed paper cut can take 30 or more hours.