From Department of Veterans Affairs
Memorial Day is a federal holiday observed on the last Monday of May (May 30 in 2011). Formerly known as Decoration Day, it commemorates U.S. soldiers who died while in the military service. First enacted to honor Union and Confederate soldiers following the American Civil War, it was extended after World War I to honor Americans who have died in all wars.
The preferred name for the holiday gradually changed from "Decoration Day" to "Memorial Day", which was first used in 1882. It did not become more common until after World War II, and was not declared the official name by Federal law until 1967. On June 28, 1968, the Congress passed the Uniform Holidays Bill, which moved three holidays from their traditional dates to a specified Monday in order to create a convenient three-day weekend. The holidays included Washington's Birthday, Veterans Day and Memorial Day. The change moved Memorial Day from its traditional May 30 date to the last Monday in May. The law took effect at the federal level in 1971.