Last month, King Salman announced February 22 as an official holiday, to mark the establishment of the first Saudi state in the Arabian peninsula three centuries ago.
The kingdom's citizens and residents were celebrating with families, as students have been given an extended weekend until Saturday, February 26.
Several events and festivals have been announced to showcase traditional crafts, culture and heritage across the kingdom. Festivities expected to take place over the next three days include a spectacular fireworks display on Wednesday.
The holiday is different from the annual National Day observed on September 22.
Malls adorned with flags are hosting live music and traditional dance performances as part of Nejnaj — a countrywide programme to raise public awareness about the kingdom's development and achievements through presentations in Jeddah, Dammam, Taif, Hail, Tabuk, Riyadh, Abha and Al Baha.
"I am so excited to see the Saudi dance," said Emma Charles, a Filipina visitor at a mall in Jeddah, as she watched a group of men in traditional clothes dancing to an Arabic song while two played traditional drums.
"It is the first time we are being exposed to the Kingdom's history, it helps us learn more about the country we have been living in for seven years," she said.
After the performance ended, guests were welcomed, with Saudi coffee and dates, to a photography exhibition to learn more about the nation's history and see traditional footwear, dresses, ornaments and other crafts being made.
"My kids are having so much fun, it's such a fun way to get to know the country's tradition," said Amnah Syed, a Pakistani living in Jeddah.
Ashwaq Kojah, a Saudi artisan, was showcasing her collection of handmade necklaces, ceramic home decor and personalised gifts featuring traditional art forms and designs.
"I am displaying some of my creative designs. I used to work with necklaces but now design various home decor pieces or personalised gifts for people."
Shops are displaying collections and designs in honour of the country's first Founding Day.
"We have a range of Saudi-inspired products in store, made by local designers and artisans," said Hala Sabbagh, a Saudi brand manager at Homegrown, a retail shop in Jeddah.
"Our most popular item would be Mansoojat foundation’s Traditional Costumes of Saudi Arabia book, which covers traditional wear around all the areas in Saudi," she told The National.
"In the accessories department, there were Mine Bags’ totes made with the Sadu print and a wider variety of Saudi symbols also embroidered on their pouches," she added.
The shop displayed a selection of embroidered kaftans showcasing the details of different areas within the Kingdom, including Rotana Alhashimi’s abayas that "highlights the intricate hand work embraced with colorful fabrics," she said..
Founding Day celebrates the historical and cultural depth of Saudi Arabia and commemorates when Imam Mohammed bin Saud established the first Saudi state in the Hijri year 1139, or February of 1727AD.
"I am planning to take my kids to see their grandfather, so they can have a story-telling session. It's important for us to learn more and teach our kids about our roots," said Yara Aladwani, a Saudi citizen.
"I am glad the country is opening up and everyone, including foreigners, can learn more about our great history.
"The official website is amazing especially for those learning design, to know more about historic art forms and symbols, I absolutely loved it," she said.
Founding Day was trending on social media platforms including Twitter, with people sharing live videos, pictures, memories and other content to celebrate the historic day.