New Jockey Club regulations at the four-day event will restrict race-goers to four alcoholic drinks at a time and see water handed out.
Last year, two footballers apologised after being photographed apparently urinating into a glass at the festival.
More than 260,000 people are expected to attend over four days.
The event is estimated to bring in Â£100m to the wider Gloucestershire economy and preparation has been many months in the making for its numerous vendors.
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Caroline Smiley, who runs Moloh, a Tetbury clothes boutique which has a stall at the event, began ordering stock for festival shoppers a year ago.
She said: "The atmosphere is fantastic, everybody's in a holiday mood and it's great to be part of it."
Patrick Daly's deli van - a favourite with jockeys and the estimated 8,000 Irish race fans who attend every year - has been a feature at the festival for 30 years.
Mr Daly said: "It's marvellous, you see lots of Irish people and we know many of them well now.
"They like that there's an Irish connection at the festival."
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Speaking previously about the alcohol restrictions, festival chief executive Ian Renton said: "It's to ensure that drinking is not the rationale for people coming racing.
"We want them to come to racing and enjoy the sport and not have those people coming who will be a nuisance to other race-goers."
Following Cheltenham, drinking restrictions will be in place at Epsom, which stages the Derby, and Aintree for the Grand National.
The Cheltenham Festival is hosting 28 championship races with some of the top horses and jockeys from Britain and Ireland.
The feature race takes place each day at 15:30 GMT, with the festival's showpiece, the Gold Cup, held on Friday.
A total of Â£4.3m in prize money is on offer, the most of any jump festival in the world.
There will be coverage across BBC Radio 5 live throughout the four days and live text commentary on the Gold Cup on the BBC Sport website.
Thousands of horse racing fans are descending on the Cheltenham Festival as measures come into force designed to shake off images of rowdy behaviour.