A lighted cup holder and method for illuminating a cup holder, the cup holder having a base component having a cylindrical body for mounting through a spa shell, a first end, a second end, and a hollow interior; a lens or light diffuser at the first end of the body and located proximal to an exterior surface of the spa shell; a decorative or functional stencil or insert located within the hollow interior at or proximal to the first end of the body; a light source; and a light holder for retaining the light source on the base component at or proximal to the second end of the body.