Prahlada and Holika
The demon king Hiranyakashipu could not turn his son Prahlada from his devotion to Vishnu, and every attempt to kill the boy failed. His sister Holika had a boon, or a shawl, that made her proof against fire. She sat in a blazing pyre with Prahlada in her lap. But the protection left her and covered the boy: Holika burned and Prahlada came out unharmed. The Holi bonfire celebrates the burning of evil and the safety of faith.
Radha and Krishna
The child Krishna, whose skin had turned dark blue from the poison of the demoness Putana, complained to his mother Yashoda that fair Radha would never love him. Yashoda laughed and told him to colour Radha's face any colour he liked. Krishna did, and the play of colours between Krishna and the gopis became Holi. In Braj, Holi is still played as Krishna's festival.
Kama Dahanam
When Shiva was lost in meditation after Sati's death, the gods needed him to marry Parvati and father a son to defeat the demon Taraka. Kama, the god of love, shot his flower arrow at Shiva, who, angered, opened his third eye and burned Kama to ashes. Kama's wife Rati wept, and Shiva promised that Kama would live on without a body. In the south the day of Holi is kept as Kama Dahanam.
Dhundhi
The Bhavishya Purana tells of a demoness, Dhundhi, who troubled the children of King Raghu's kingdom. She could be driven away only by the noise, laughter and pranks of children, so on the full Moon of Phalguna children were allowed to shout, play and make mischief around a fire, and she fled. This is said to be why Holi is a day of licensed noise and fun.