The Kapil Muni Fair is the largest fair of Bikaner district held on Kartik Poornima at Kolayat--originally Kapilayatan--named after the sage Kapil who is believed to have done tapasya (meditation) here for the redemption of mankind. Kolayat is situated in an arid area. Ther is a lake with 52 ghats shaded by banyan trees around the lake. A temple dedicated to Kapil Muni is situated on the Kapil Muni ghat and it has a marble statue of the saint.

It is considered very auspicious to take a dip on Kartik Poornima in the Kolayat lake. Visiting Kolayat has been considered to be a tirtha or pilgrimage of great importance and it is believed that one day's stay at Kolayat benefits as much as 10 years spent at any other sacred place

The legendary Maharishi Kapil and the Kapilayatan lake find mention in the Puranas and Kapil Muni is believed to have descended from Lord Brahma.

Worship in the temples is performed by Sewag Brahmins whose priesthood is hereditary. Aarti is performed twice daily and bhog is offered. On the day of Kartik Poornima, the day of Kapil Muni Fair, Deep Malika is performed in the evening. People float lighted lamps in the sacred lake as a part of the rituals and this creates a beautiful sight. Offerings are made at the temples consisting of coconut, batasha (sugar drops), dry fruits, mishri(sugar cubes) and cash.