The week-long event will see 15,000 young people aged under 25 competing in categories including singing, dancing, drawing and cooking.
Around 100,000 visitors are expected to attend the annual touring event held at Llancaiach Fawr in Nelson this year.
The Urdd was established in 1922 to help young people learn and socialise in the Welsh language.
S4C broadcaster Iwan Griffiths, who has competed in the Urdd Eisteddfod many times, said it was important it visited areas like Caerphilly, where there were "pockets of Welsh speakers".
Hosting committees must raise Â£200,000 for each event and people in Caerphilly have organised a series of fundraisers over the past year.
Sunday's highlights include a morning service led by pupils from Ysgol Gyfun Cwm Rhymni and an opening concert led by BBC One Show's Alex Jones.
There will also be performances from acts including singer Kizzy Crawford and Huw Euron.
Competitions run throughout the week, with those involving choirs and dance groups the last to take place on Saturday 30 May.
Event mascot Mistar Urdd will welcome an old friend to the festival this year, when the character Pen Gwyn from Patagonia reappears for the first time since 1979.
Pen Gwyn's inclusion at the event will mark the 150th anniversary of Welsh settlers arriving in Patagonia, Argentina.
There is live coverage on BBC Radio Cymru and on BBC Wales' Cymru Fyw online service. There is also television coverage during the week on S4C, with English commentary of live events on the channel's red button.

The report on business trends from the accountancy and services group BDO said the UK economy was already showing signs of slowing ahead of the EU vote.
Manufacturing had the gloomiest outlook, and job creation in the economy slowed to a two-year low.
BDO's Peter Hemington said uncertainty prompted by Brexit had also disrupted investment in the UK economy.
The report shows business output, which reflects company orders for the next quarter, slipped to 99 last month, compared with 99.7 in May and 100.6 in April.
Meanwhile, business optimism also slid, falling to 98.9 in June from 99.4 in May.
But Mr Hemington added: "In all likelihood, whatever arrangements the UK eventually arrives at with the EU won't look very different from what we have at the moment.
"So businesses cannot afford to get caught up in the hysteria. They need to hold their nerve and continue to invest in the UK.
"We are at a crucial moment where we must be sensible in protecting the UK economy. We need a plan of action now that gives businesses the added confidence to progress with investment plans."
BDO's research is based on the results of the UK's main business surveys
One of Europe's biggest youth festivals - the Urdd Eisteddfod - begins in Caerphilly county on Sunday.
[NEXT_CONCEPT]
Uncertainty around Brexit has dragged UK business output and optimism to three-year lows, a report suggests.