Amy O’Hara lost her air-fiddle title to another local, Peter Crann, in what organisers billed as the world championship of the event.
The contest was an off-beat sideshow to the six-day festival which ended yesterday and which was attended by 25,000 music lovers.
Dozens of acts included international legends The Buena Vista Social Club and local group Dervish whose Eurovision flop seems only to have increased their popularity in Sligo.
The festival is estimated to have brought in more than €3.6 million to the town.
Organiser Rory O’Connor said the festival, although only in its third year, has established itself as a firm annual event on the music calendar.
He said: “Based on the growth rate over the past three years more people are tuning in to the Sligo experience.”
Dervish’s Shane Mitchell, artistic producer of the festival, said: “I now see strong parallels between Sligo Live and big international festivals I have performed at with Dervish.
“Every musician I met enjoyed the best weekend of their year and will come back to Sligo.”