While sexy Punta del Este and its boho-chic neighbor, José Ignacio, have stolen the spotlight in the past few years, travelers to Uruguay should not overlook the country’s southwestern reaches. Just a one-hour ferry ride from Buenos Aires, the region—anchored by Colonia del Sacramento, a unesco World Heritage site—delivers the perfect blend of luxury and authenticity. This 17th-century Portuguese stronghold, with its cobblestoned alleyways, postcolonial ruins, and scenic farmland, has recently seen the opening of elegant micro-estancias and artisanal food shops, and even has a nascent arts scene.
Shoppers will fall for boutiques offering handmade ceramics, wool sweaters, and shawls, and gastronomes will love the European-style restaurants opened by entrepreneurial expats. Stay in one of the 20 private bungalows at the Four Seasons Resort Carmelo, Uruguay (doubles from $385), 50 miles north, with views of the eucalyptus-lined Río de la Plata and the distant glow of Buenos Aires. For those looking for earthier charms, there’s Bodega y Granja Narbona (lunch for two $90), with a working dairy farm, a brick-walled restaurant, and a beautifully restored 1909 cellar stocked with the country’s rustic Tannat wine.
Colonia Address Book
From Buenos Aires, take the one-hour ferry, Buquebus (buquebus.com; $120 round-trip), to Colonia del Sacramento. From Montevideo, Uruguay’s capital, the best option is to rent a car for the 110-mile drive northwest.
Where to Stay
Casa los Jazmines The style at this new guesthouse may be rustic, but the amenities are sophisticated: 400-thread-count Egyptian cotton sheets, iPod docking stations, and an impressive selection of Uruguayan and Argentine wines.Doubles from $120.
Four Seasons Resort, Carmelo With spacious suites and bungalows surrounded by eucalyptus trees, this Asian-inspired hotel and spa has a true Zen feel. Guests lounge by the pool while sipping caipiroskas (vodka with lime wedges and sugar) and enjoying the views of the Rio de la Plata.Doubles from $385.
La Casa de los Limoneros At this seven-room lodge, house-made cakes and pastries are served on a leafy veranda furnished with wrought-iron tables. The pool overlooks a field of lemon trees.Doubles from $140.
Where to Eat
Bodega y Granja Narbona A brick-walled rural restaurant where the Parmesan cheese comes from the on-site dairy farm and the pasta is handmade. Right outside, a restored 1909 cellar is open for tastings; Narbona’s two-year-old winery just released a line of Tannats.
Doubles from $180; lunch for two $90.
El Drugstore This funky restaurant—filled with brightly painted chairs and bold paintings—specializes in Spanish-style gambas al ajillo (garlic shrimp) and other tapas. For fun, patrons can dine inside a black 1929 Ford A, one of two vintage cars parked outside.
Lunch for two $50.
Lentas Maravillas A cozy riverside teahouse that serves house-made carrot cake, apple tarts, and brownies, plus Italian espresso and a variety of loose-leaf-tea infusions.
Dessert for two $18.
Where to Shop
Almacén la Carlota This stylish general store is stocked with papier-mâché toys, zinc bowls, and works by local painters.
La Casa de Colonia At a boutique behind her home, owner Beatriz Butler showcases up-and-coming artists, including Ana Noya, distinguished in 2010 at the Salón Nacional de Artes Visuales, a prestigious art fair in Buenos Aires. Also on display: Butler’s own glass-and-stone jewelry.
Oveja Negra Designer Silvia Sarti uses traditional looming techniques to make jackets, skirts, sweaters, and shawls in soft merino wool.