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Rehearsal dinners are held on the day or night of the wedding rehearsal. Traditionally the wedding rehearsal is held the night before the wedding but in some circumstances it is not.
Rehearsal dinners can be held on the same day as the rehearsal, before or after the reception. Rehearsals can be held the night before the wedding or a few days before the wedding depending on the officiant and church schedules and when your attendants are available.
Rehearsal dinner invitations can be sent 4-6 weeks before the rehearsal. You will want to send them out closely with the wedding invitations in case the guests need to reserve an extra night at their hotel to attend the rehearsal also.
Rehearsal dinners are traditionally hosted by the groom's parents. If the groom and his parents are from out of town the bride's parents may want to help the groom's parents in selecting an appropriate location for the party. If there is a budget concern the bride's parents may want to open up their home to a small rehearsal dinner cookout for just the attendants, parents and bride and groom - with the groom's parents' permission.
The rehearsal dinner is just one last close celebration for the bride and groom and their attendants before the big day. It can be casual or formal but it should suit the bride and groom so they have a good time.