Modern customs of the holiday involve celebrations where early morning festivals are held to watch the groundhog emerging from its burrow. In southeastern Pennsylvania, Groundhog Lodges (Grundsow Lodges) celebrate the holiday with fersommlinge, social events in which food is served, speeches are made, and one or more g'spiel (plays or skits) are performed for entertainment. The Pennsylvania German dialect is the only language spoken at the event, and those who speak English pay a penalty, usually in the form of a nickel, dime or quarter, per word spoken, put into a bowl in the center of the table.

The largest Groundhog Day celebration is held in Punxsutawney, Pennsylvania, where crowds as large as 40,000 have gathered to celebrate the holiday since at least 1886. Other celebrations of note in Pennsylvania take place in Quarryville in Lancaster County, the Anthracite Region of Schuylkill County, the Sinnamahoning Valley and Bucks County. Outside of Pennsylvania, notable celebrations occur in the Frederick and Hagerstown areas of Maryland, the Shenandoah Valley of Virginia, Woodstock, Illinois,, Lilburn, Georgia and among the Amish populations of over twenty states and at Wiarton, Ontario and Shubenacadie, Nova Scotia in Canada. The University of Dallas in Irving, Texas has taken Groundhog Day as its official university holiday and organizes a large-scale celebration every year in honor of the Groundhog.

Groundhog Day received worldwide attention as a result of the 1993 film of the same name, Groundhog Day, which was set in Punxsutawney and featured Punxsutawney Phil.

An early American reference to Groundhog Day can be found in a diary entry, dated February 5, 1841, of Berks County, Pennsylvania storekeeper James Morris:

In Scotland the tradition may also derive from an English poem:

As the light grows longerThe cold grows strongerIf Candlemas be fair and brightWinter will have another flightIf Candlemas be cloud and rainWinter will be gone and not come againA farmer should on Candlemas dayHave half his corn and half his hayOn Candlemas day if thorns hang a dropYou can be sure of a good pea crop

This tradition also stems from similar beliefs associated with Candlemas Day and Groundhog Day. Candlemas, also known as the Purification of the Virgin or the Presentation, coincides with the pagan observance Imbolc.

In western countries in the Northern Hemisphere the official first day of Spring is almost seven weeks (46–48 days) after Groundhog Day, on March 20 or March 21. About 1,000 years ago, before the adoption of the Gregorian calendar when the date of the equinox drifted in the Julian calendar, the spring equinox fell on March 16 instead. This is exactly six weeks after February 2. The custom could have been a folk embodiment of the confusion created by the collision of two calendrical systems. Some ancient traditions marked the change of season at cross-quarter days such as Imbolc when daylight first makes significant progress against the night. Other traditions held that Spring did not begin until the length of daylight overtook night at the Vernal Equinox. So an arbiter, the groundhog/hedgehog, was incorporated as a yearly custom to settle the two traditions. Sometimes Spring begins at Imbolc, and sometimes Winter lasts 6 more weeks until the equinox.

Many towns that celebrate Groundhog Day throughout North America have winter-predicting groundhogs. By far, the most notable groundhog is Punxsutawney Phil of Punxsutawney, Pennsylvania. Other groundhogs of note include Smith Lake Jake, Staten Island Chuck, General Beauregard Lee, Shubenacadie Sam and Wiarton Willie.

Groundhog Day proponents state that the rodents' forecasts are accurate 75% to 90% of the time. A Canadian study for 13 cities in the past 30 to 40 years puts the success rate level at 37%. Also, the National Climatic Data Center reportedly has stated that the overall prediction accuracy rate is around 39%.