The supermarket has agreed an initial one-year deal with Wychwood Festival, which is positioned as a family festival.
Karen Himsworth, manager of Waitrose Events, said: "This is the first time Waitrose has sponsored this festival, and our presence at Wychwood will really help us reach out to new audiences and engage customers in a way we have not done before."
The retailer is planning activity surrounding its sponsorship, but was unable to disclose any details.
The festival, now in its sixth year, has Liverpudlian pop/rock band The Lightning Seeds headlining on the Saturday night, with The Levellers, The Happy Mondays, Seth Lakeman and 6 Day Riot also performing. Other acts include Justin Currie, Del Amitri, Goldheart Assembly and Kila.
In 2008, Waitrose was confirmed as the shirt sponsor of Reading FC, marking the first time a British food retailer has sponsored a major football team. The supermarket currently appears on the Championship team's home and away shirts.
The retailer operates 225 stores across the UK and achieved a sales increase of 9% to £4.5bn for the 52 weeks ending 30 January 2010. It also registered an operating profit rise of 26.8% to £262.2m.
Last year, the supermarket opened three convenience stores and, as part of plans to increase its customer reach, began a partnership with Welcome Break, opening outlets within the service stations.
Waitrose plans to start its food-offering trial with Boots this month. The deal will see a small number of Boots branches offering Waitrose food. In return, Waitrose will stock Boots health and toiletry lines.