Kimberly Rew, who founded Katrina and the Waves, wrote this song. Prior to The Waves, Rew was the guitarist between 1978 and 1980 of The Soft Boys, a band which also featured Robyn Hitchcock. Rew also wrote "Going Down to Liverpool," which was covered by The Bangles and "Love Shine A Light," which won the 1997 Eurovision Song Contest.
This song about unadulterated joy has been used in a number of feature films including: The Secret of My Success (1987), Bean: The Ultimate Disaster Movie (1997) and American Psycho (2000). Also, Jack Black's character in High Fidelity (2000) plays this song on a cassette tape. A cover by the duo Aly & AJ was used in the 2005 Disney motion picture Herbie: Fully Loaded.
This is the favorite song of Philip J. Fry, a character from the Futurama TV Show. He sings this while showering, though the only words he remembers are "I'm walking on sunshine," so he hums the rest. (thanks, Edward Pearce - Ashford, Kent, England, for all above)
Katrina and the Waves are considered a one-hit-wonder in the United States (where the band name evoked unfortunate images after the 2005 Hurricane Katrina disaster), but they had another hit in the UK with Love Shine A Light, which was entered in the Eurovision Song Contest.