The medieval town's tree is made up from over 800 lights laid out on the side of Mount Ingino.
These World Tallest Christmas tree is 800 metres high (2624 feet), 400 meters (1312 feet) wide. On the top of the tree and at the summit of the mountain, a star over 1000 meters (3,280 feet) long sparkles in the night sky.
"This started in 1981 when some inhabitants decided to make this tree which then became considered the biggest tree in the world," said the head of the Christmas tree committee Danilo Sannipoli.
"There are about 15-20 kilometers of cables involved, thousands of electric plugs to connect and hundreds and hundreds of lights that make up this Christmas display," he said.
This year, the tree is even greener than usual, with solar panels being used to cut down on electric power.
"For us in Gubbio, this Christmas tree has become a real tradition, we just couldn't do without it", said young Gubbio resident Matteo Fumanti.
"Particularly for those of us who are young like myself, we have always been able to look at this tree," he said.
Local inhabitants from miles around get the benefit of seeing the tree which lies on the side of the slope at some 900 metres high.