Filmfest Dresden was founded in the spring of 1989 and since then has developed from being a forum for banned or rarely screened feature films into a well positioned international festival for short films. The festival's International Competition has been held since 1992, and this was followed in 1998 by the establishment of a National Competition for German productions. Since 2006, the Saxon Minister for Science and Fine Arts Promotion Prize worth €20,000 has been awarded here.

The primary focus of the six day festival in Dresden is its International Competition and National Competition. Fictional and animated shorts up to a maximum of 30 minutes compete here in various categories for the highly coveted Golden Horsemen. Filmfest Dresden is one of the best endowed short film festivals in Europe with prizes and awards worth €61,000. In addition to the competition sections, the festival week provides an extensive range of special programmes with documentaries and experimental films, a children's programme, retrospectives and numerous country-based programmes as well as a supporting programme with panel discussions, master classes and workshops.

The "Perspective for Animated Film" exchange forum was first held during the 2002 festival and has remained a permanent feature of the festival since then. It is targeted at young European filmmakers, screenwriters and producers and provides them with a platform for shared projects. The participants spend one week together in Dresden and one in an eastern European capital city where they attend workshops on training, production and funding opportunities across Europe.

In addition to the festival itself which is held annually in April, the post-festival tour and the open-air tour have established themselves increasingly as important mainstays for Filmfest Dresden. Since 2001 Filmfest Dresden has organised an extensive tour each year after the festival called the "Short Film Expedition" that visits about ten German cities. This permits prize winning shorts to also reach larger audiences beyond the festival itself. In addition there is the annual open-air tour in the summer which visits Bonn, Jena and Munich for instance and screens prize winners and audience favourites with the filmmakers present at the screenings.