On May 5, 1862, a force of 2000 relatively inexperienced Mexican soldiers under General Ignacio Zaragoza were able to defend their fort in the state of Puebla against 6000 French soldiers, who had invaded Mexico in Napoleon III's attempt to put his puppet Maximilian of Austria on the throne of Mexico. The French army was considered one of the best in the world, and the Mexican victory was heartening for the defenders of the country, although the war against the French continued for some time afterward.

According to Tampa Bay area magazine the Weekly Planet, the celebration of Cinco de Mayo in the U.S. by non-Mexicans is the result of a 1980s publicity campaign by the manufacturers of Corona beer. Although Corona is a Mexican product, Mexican celebrations of Cinco de Mayo are not the commercial drinking fiestas found north of the border, and in fact are largely limited to the region around the battle site. Some other U.S. organizations do try and use the day to educate about the history and culture of Mexico.

Sources:
http://www.weeklyplanet.com/2001-05-03/food_feature.html
http://plazasol.uson.mx/iesa/revista/7/5mayo.htm
http://dailytitan.fullerton.edu/issues/spring_99/05_05/news/cincode.html