The Battle of Stamford Bridge saw an army led by the Saxon King Harold defeat a group of Viking invaders.
Villagers are holding a re-enactment of the fighting with a descendant of King Harald of Norway who was killed by the Saxons.
Guests at the event include the Archbishop of York Dr John Sentamu, who was given a tour of the battlefield.
Chris Rock, chairman of the Battle of Stamford Bridge Society, said the battles in Yorkshire had been overshadowed by King Harold's death at the hands of William of Normandy a few days later at Hastings.
"What happened here decided the outcome at Hastings, which is the battle that everyone remembers," he said.
"Without him being here he would have been on the south coast waiting for William.  He would have pushed him back into the sea. We'd have a Saxon line of kings now, maybe."
As well as the re-enactment, villagers are working on a Bayeux-style tapestry depicting the battle.
The weekend's events will culminate with the burning of Viking boat at sunset on Sunday.
An East Yorkshire village has been commemorating the 950th anniversary of a historic battle.