Irving Berlin composed the melody more than 30 years earlier, under the title “Smile and Show Your Dimple,” but never published it. Berlin pulled it out of his trunk in 1933 for the Broadway musical revue As Thousands Cheer, which had the usual structure of being a "living newspaper." Each scene was presented as a different section of the paper. The show included other hits like “Heat Wave” for the weather page, and “Supper Time” for the hard news.
“Easter Parade” was used to illustrate the special color magazine section, which was then printed with a technique called “rotogravure,” which is referred to in the lyric. The song uses as its setting New York City's tradition of people dressed in their churchgoing Easter morning best, promenading down Fifth Avenue.
The song was introduced by Marilyn Miller and Clifton Webb on Broadway, and it was used in another film, “Alexander’s Ragtime Band” (1938) before it became the title song of “Easter Parade.”
It was one of several holiday-themed songs that Berlin wrote, also including “White Christmas” and “God Bless America” (for July 4).
Here is a clip (below) of Fred Astaire and Judy Garland singing it in “Easter Parade”: