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Internal marketing has been the emerging area and been the main issues in various areas. Internal marketing practices are needed in a lot of companies as these make possible to integrate the internal customers as the main focus in acquiring customer satisfaction. In particular, local festivals urgently needed the theory of internal marketing in that local festival organization have limited time frame. Accordingly, the paper is to find out not only the relationships between internal marketing factors and internal customer satisfaction, between internal customer satisfaction and internal customer loyalty, but also the moderating effects of internal customer involvement in the forming relationship between internal marketing factors and internal customer satisfaction. This survey has been proceeded being targeted local merchants and residents who participated in "Sancheong Medicinal herb festival". 264 questionnaires excepting 36 copies of false entries were finally analyzed. Results were as follows. First, the internal marketing factors including internal communication, education/training, management support, reward system showed positive influences on the internal consumer satisfaction. Second, the internal consumer satisfaction also showed the positive influences on the internal consumer loyalty. Third, the mediating effects were found in some relationships meaning that involvement should be considered crucially in implementing internal marketing in local festivals. Results imply that internal marketing managers in local festivals not only serve useful information on internal marketing strategy but also become aware of the importance of customer involvement in managing internal marketing.