Lug instituted the harvest festival of Lughnasadh in memory of his foster-mother, Tailtiu, held on 1 August at the town that bears her name (now Teltown, County Meath), and to have led horse races and displays of martial arts. It is a celebration of Lugh's triumph over the spirits of the Other World who had tried to keep the harvest for themselves. It survived long into Christian times and is still celebrated under a variety of names. Lughnasadh is now the Irish name for the month of August.

Lug is said to have invented the board game fidchell. He had a dog called Failinis.

He had several wives, including Buí, who was buried at Knowth, and Nás, whjo gave her name to Naas in County Kildare. His daughter or sister was Ebliu, who married Fintan. One of his wives, unnamed, had an affair with Cermait, son of the Dagda. Lug killed him in revenge, but Cermait's sons, Mac Cuill, Mac Cecht and Mac Gréine, killed him in return, drowning him Loch Lugborta. He had ruled for forty years.

In the Ulster Cycle he fathered Cúchulainn on the mortal maiden Deichtine. When Cúchulainn lay wounded after a gruelling series of combats during the Táin Bó Cuailnge (Cattle Raid of Cooley), Lug appeared and healed his wounds over a period of three days.

In Baile in Scáil (The Phantom's Trance), a story of the Historical Cycle, Lug appeared in a vision to Conn of the Hundred Battles. Enthroned on a daïs, he directed a beautiful woman called the Sovereignty of Ireland to serve Conn a portion of meat and a cup of red ale, ritually confirming his right to rule and the dynasty that would follow him.

In the Fenian Cycle the dwarf harper Cnú Deireóil claimed to be Lug's son.

The Luigne, a people who inhabited Counties Meath and Sligo, claimed descent from him.

LUG'S NAME AND NATURE

Lug's name has been interpreted as deriving from the Indo-European root *leuk-, light, and he is often surrounded by solar imagery, so from Victorian times he has often been considered a sun god, similar to the Greco-Roman Apollo. Alexei Kondratiev notes his epithet lonnbeimnech and that folklore in County Mayo described thunderstorms as a battle between Lug and Balor, and concludes that "if his name has any relation to 'light' it more properly means 'lightning-flash' (as in Breton luc'h and Cornish lughes)", making him a storm god. He also appears in folklore as a trickster.

However he is a more complicated figure than any one such designation would allow. The best parallels from classical mythology would appear to be the Roman god Mercury and his Greek counterpart Hermes. Julius Caesar says that Mercury, believed to the inventor of all the arts, was the most revered god in Gaul, which parallels Lug's epithet samildanach and his mastery of all arts. Juliet Wood interprets Lug's name as deriving from the Celtic root *lugios, oath, making him a god of contracts like Mercury.

In Irish tradition Lug is associated with youth, kingship and healing, and his mastery of all arts suggests he transcends all divine functions. Like his Gaulish counterpart Lugus, he was compared with the archangel Michael.