This year's theme is "Just Imagine." The parade will make its way through the streets of Pasadena on Jan. 2.
Loyola Marymount University is celebrating 100 years with its first ever float evoking images of the past and future.
Alumni raised $300,000 from private donors to make the float a reality.
"It was important to raise the money to do this because we didn't want to use any university dollars," said Kevin Delaney, class of 1993. "Being our centennial year, this is one of the keystone events."
Volunteers at the LMU float on Tuesday were in a long assembly line of people who were placing glue and perfecting every last petal.
The city of Glenadle was constructing its carnival-like float and the city of Los Angeles was readying some life-sized dinosaurs.
Several of the floats are also being built and decorated in Irwindale.
The AIDS Foundation float will feature Elizabeth Taylor, who was a big advocate for AIDS research. It will have 10,000 roses.
If you text the name "FLOWER" and the person's name to 20222, they will carve that person's name in the vial of water for those flowers.
The Nature Balance float is also being built at the Irwindale warehouse. It is continuing its tradition of the surfing dog with 65,000 gallons of water for the giant pool.
They are hoping to be the world's longest and heaviest float. The Guinness Book of World Records will be there later this week to determine that.
One of the more beautiful floats is the Kaiser Permanente caterpillar float.
"The name of our float is 'Everybody Walk,'" said Kaiser volunteer Mayra Suarez. "This is a caterpillar that's going to lead us into a healthier 2012. What we want to do is pretty much encourage folks to get out there and start moving. With just 30 minutes of exercise a day it's really a life-changing habit that we can all include into our lives."
Suarez said that along with the caterpillar, there will be nine float riders, all kids that have overcome life-threatening diseases.
J.R. Martinez, an Iraq war veteran and winner of the 13th season of "Dancing With The Stars," will be the grand marshal.