Bali is renowned for its diverse and sophisticated art forms, such as painting, sculpture, woodcarving, handcrafts, and performing arts. Balinese cuisine is also distinctive. Balinese percussion orchestra music, known as gamelan, is highly developed and varied. Balinese performing arts often portray stories from Hindu epics such as the Ramayana but with heavy Balinese influence. Famous Balinese dances include pendet, legong, baris, topeng, barong, gong keybar, and kecak (the monkey dance). Bali boasts one of the most diverse and innovative performing arts cultures in the world, with paid performances at thousands of temple festivals, private ceremonies, or public shows.

The Hindu New Year, Nyepi, is celebrated in the spring by a day of silence. On this day everyone stays at home and tourists are encouraged to remain in their hotels. On the day before New Year, large and colourful sculptures of ogoh-ogoh monsters are paraded and finally burned in the evening to drive away evil spirits. Other festivals throughout the year are specified by the Balinese pawukon calendrical system.
 
Celebrations are held for many occasions such as a tooth-filing (coming-of-age ritual), cremation or odalan (temple festival). One of the most important concepts that Balinese ceremonies have in common is that of désa kala patra, which refers to how ritual performances must be appropriate in both the specific and general social context. Many of the ceremonial art forms such as wayang kulit and topeng are highly improvisatory, providing flexibility for the performer to adapt the performance to the current situation. Many celebrations call for a loud, boisterous atmosphere with lots of activity and the resulting aesthetic, ramé, is distinctively Balinese. Often two or more gamelan ensembles will be performing well within earshot, and sometimes compete with each other to be heard. Likewise, the audience members talk amongst themselves, get up and walk around, or even cheer on the performance, which adds to the many layers of activity and the liveliness typical of ramé.

Kaja and kelod are the Balinese equivalents of North and South, which refer to ones orientation between the island's largest mountain Gunung Agung (kaja), and the sea (kelod). In addition to spatial orientation, kaja and kelod have the connotation of good and evil; gods and ancestors are believed to live on the mountain whereas demons live in the sea. Buildings such as temples and residential homes are spatially oriented by having the most sacred spaces closest to the mountain and the unclean places nearest to the sea.

Most temples have an inner courtyard and an outer courtyard which are arranged with the inner courtyard furthest kaja. These spaces serve as performance venues since most Balinese rituals are accompanied by any combination of music, dance and drama. The performances that take place in the inner courtyard are classified as wali, the most sacred rituals which are offerings exclusively for the gods, while the outer courtyard is where bebali ceremonies are held, which are intended for gods and people. Lastly, performances meant solely for the entertainment of humans take place outside the walls of the temple and are called bali-balihan. This three-tiered system of classification was standardised in 1971 by a committee of Balinese officials and artists to better protect the sanctity of the oldest and most sacred Balinese rituals from being performed for a paying audience.

Tourism, Bali's chief industry, has provided the island with a foreign audience that is eager to pay for entertainment, thus creating new performance opportunities and more demand for performers. The impact of tourism is controversial since before it became integrated into the economy, the Balinese performing arts did not exist as a capitalist venture, and were not performed for entertainment outside of their respective ritual context. Since the 1930s sacred rituals such as the barong dance have been performed both in their original contexts, as well as exclusively for paying tourists. This has led to new versions of many of these performances which have developed according to the preferences of foreign audiences; some villages have a barong mask specifically for non-ritual performances as well as an older mask which is only used for sacred performances.

Balinese society continues to revolve around each family's ancestral village, to which the cycle of life and religion is closely tied. Coercive aspects of traditional society, such as customary law sanctions imposed by traditional authorities such as village councils (including "kasepekang", or shunning) have risen in importance as a consequence of the democratisation and decentralisation of Indonesia since 1998.