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.
One of Europe's biggest youth festivals - the Urdd Eisteddfod - begins in Caerphilly county on Sunday.