Gion Matsuri is one of the largest festivals in Japan.
This festival actually started in 869, when a priest of Yasakajinja-Shrine led a procession of people through Kyoto in an attempt to pray Shinto gods to stop the plague raged at the time. The plague soon ended but this event became the most popular festival in Kyoto.
Most exciting part of the festival is Yoiyama ( eve of the Festival ) from 14th - 16th,and Yamaboko Junko ( The Grand Procession ) on 17th, but many other ceremonial rituals are held throughout July.
Here's a list of main festival events

Also visit www.shunkoin.com to find out more  about Kyoto.