The fun began back in 1685, when James II authorised a fair "for the purchase and sale of horses, mares and geldings". Today, it is a week- long jamboree held on Fair Hill, about a mile to the north of the town. Here, thousands of nomads converge in an assortment of vehicles, from horse-drawn vardos to huge chrome caravans.
The procession up to Fair Hill is a sight to behold, an unruly cavalcade of mobile homes, pony-traps and trailers, plus the occasional Rolls-Royce. Not to mention the horses. You will find dappled cobs, cross-breeds, thoroughbreds, New Forest ponies flanking the colourful convoy. Already a dizzy excitement fills the air, warm gypsy laughter and the strange argot of the traveller.
"Look at that bloody musker!" grins Isaac Richardson, as a flustered policeman tries to control the throng. A horse-breeder from Wales, Isaac has been coming to Appleby for decades to sell trotting-ponies and meet relatives who are usually scattered around the shires.
"It's all gadjes and smudge-grafters this year," his brother complains, referring to tourists and photographers snapping the new arrivals.
And there is plenty to please the eye as the wanderers settle in. Nowadays, most own modern caravans, but traditional vardos still take your breath away. Brightly painted in blues and reds, these bow-topped cocoons gleam with gilded carving and vibrant arabesques. Between the high wheels, a kettle-box holds pots and pans black with the soot of campfires.
Inside, brown-faced matriarchs ply the ancient craft of dukkeripen, or fortune-telling, scanning your left hand with hawk-like eyes. Wrapped in shawls and silk headscarves, they look the part, though their insights can cost you a tenner. Money talks at Appleby, and the heaving hill is crammed with stalls offering everything from saddles to silver-ware.
Town clerk Brian Row helps run it all with a committee that includes Romany elders. "They're super people," he says. "Very easy to work with. And let's face it, they make a fortune for the town. We get visitors from all over the world - America, Japan, you name it."
While some locals have mixed feelings about the annual invasion, Brian loves every minute of it. "It's a glimpse of a bygone world," he says. "The colour, the old hooped wagons with horses tied behind, it's magic."
A former banker, he finds the wheeling and dealing another attraction. "The bartering is fantastic. The buyer slaps the seller's palm with each bid, getting faster and faster. Finally they seal the deal, the seller grabs the buyer's hand and all hell breaks loose."
Of course, Fair Hill has its sharp operators so watch out for pitch-and- toss schools where the unwary can get fleeced. But keep your wits about you and you can pick up a bargain, such as fine china going for a song. Some parking is available on fields near the fair and fast-food stalls abound. There are basic toilet facilities, but the site is not recommended for those with disabilities.
The carnival atmosphere is infectious and Appleby's pubs are packed all week, occasionally even running out of beer. After a few jars, you may see a traveller show off the gypsy step dance, performed on a board thrown on to the bar floor. Accommodation comes under heavy pressure at this time and advance booking is essential. Penrith, only 20 minutes' drive away, may be a better bet if you are coming late.
Back on Fair Hill, the horse-traders are advertising their wares. Wild- eyed Romany youths are in their element now, racing their steeds bareback down the leafy lanes to impress prospective buyers. Other nags are staked in the byways, where dealers eye them beneath the brims of lowered trilbies.
Husky blacksmiths stripped to the waist are busily shoeing the merchandise. Huge wads of notes change hands as these magnificent animals are sold for racing, hunting or breeding. Others are snapped up by riding-schools or bought by parents for enraptured kids.
Perhaps the best spectacle of all is the ritual bathing of horses in the River Eden on the last Tuesday, when the Romany passion for his four- legged soul mate really comes into its own. The trusty mounts are brought back into the town centre and then scrubbed and groomed on the grassy riverbanks.
In full view of the tourists packing the bridge, the gypsy dare-devils straddle their steeds and plunge into the water. To cries of encouragement from their sweethearts, the young bloods battle the strong currents, stunning the crowd with their bravery and horsemanship before struggling triumphantly to safety.
In truth, this is probably a courtship ritual as much as an equestrian display. For the visitor, the fair is a pageant of colour and fun, but to the traveller, it is the highlight of the social calendar. While older nomads look forward to family reunions, the younger generation set their hearts on romance. The fair is the traditional place for betrothals, and Penrith Registry Office has greeted many a blushing gypsy couple in early June.
On the Tuesday afternoon, a recent addition is harness races at Holme Farm Field, not far from the town centre. Here travellers and locals compete in painted rigs and elegant sulkies against a background of sideshows and horse parades. It is a chance for adventurous traders to stake their profits, and side-bets run well into four figures.
But the climax comes the next day, in the feverish bargaining of the final sale day. It is now or never, and the roms (men) huddle in tense knots striking deals in a mixture of Romany and slang. On this, the eve of the millennium, they still retain their distinctive style - black trilbies, silk neckerchiefs, gaudy braces, hair a strange mixture of gypsy curls and Elvis Presley quiffs. Thankfully, some things never change.
APPLEBY HORSE FAIR
Appleby is off the A66, 13 miles from Penrith, which is off the M6. Appleby railway station is on the Carlisle-Settle line and there are also bus links to Penrith, Carlisle and Darlington. There is also a railway station at Penrith.
The Appleby Horse Fair is held this year from 3-9 June and the Fair Hill site is open to the public from 6 June. Final sale day is 9 June. Admission is free. For further details, including accommodation, contact the Appleby Tourist Information Centre (tel: 01768 351177).