Dia de los Muertos holds that the souls of the dead return each year to visit the living, and pan de muerto is baked in the days beforehand specifically to be ready for that visit: bakeries across Mexico increase production sharply through late October, and the bread is sold in the same markets and stalls that sell marigolds, sugar skulls and the other materials of the ofrenda. The dough is enriched with eggs, butter and orange blossom water or anise, giving the finished loaf a soft, slightly sweet crumb closer to a brioche than to an everyday bread, and it is usually dusted with plain or colored sugar once baked.
Regional versions vary in shape and decoration, some loaves are formed as a plain round with the bone strips laid across the top, others are shaped into small figures or animals, but the underlying idea, bread specifically baked to welcome the family's dead back for one night, holds across the regional variation. The custom belongs most strongly to central and southern Mexico, where the November holiday itself is kept most elaborately, and it has spread with Mexican communities into the wider diaspora largely intact. Many families eat pan de muerto at home with hot chocolate or atole, a warm corn based drink, in the evenings leading up to the holiday itself, well before the bread's ofrenda role each November first and second, so the same bread serves both as a family treat beforehand and as the offering set out for the dead once the holiday proper begins.