Steffen Jagenburg
| Credit: Steffen Jagenburg

No city embodies Germany's uneasy alliance of old and new more than its fashion and media capital, Hamburg. Part grit and part high style, Hamburg is as well known for its tony residential neighborhoods as it is for the infamous Reeperbahn, a red-light district that rivals Amsterdam's. But a recent infusion of glamour has spawned a new entrepreneurial spirit. Hipsters are reclaiming the Kiez, the shady district surrounding the Reeperbahn, and opening sleek new clubs alongside the working girls. Bursting at the seams, the city center will soon double in size with the completion of an ambitious 383-acre harbor redevelopment project. In Hamburg, it seems, seediness has succumbed to style.

Hotel Vier Jahreszeiten (9—14 Neuer Jungfernsteig; 49-40/3494-3150; doubles from $245) was recently restored to its 1896 greatness by the Raffles hotel group. The antique-filled rooms still house visiting dignitaries and celebrities, but its Amrita Spa and Euro-Asian restaurant, Doc Cheng's, are welcome blasts of cool.

Across the Binnenalster lake, society types hold court at the Kempinski Hotel Atlantic Hamburg (72—79 An der Alster; 800/426-3135 or 49-40/288-880; doubles from $200). Built in 1909 for Grand Tour travelers arriving via steamer, its maritime-themed rooms still charm.

Fast-forward to 2001 at Side Hotel (49 Drehbahn; 49-40/309-990; doubles from $181), Hamburg's first contemporary-design property, with interiors by Milan-based designer Matteo Thun. The dramatic steel-and-glass façade opens onto a soaring atrium dominated by a moody Robert Wilson lighting installation that replicates the changeable Hamburg weather.

The chic muted gray rooms aren't the main attraction at the Dorint am Alten Wall (40 Alter Wall; 49-40/369-500; doubles from $190); top billing goes to the hotel's Bistro, owned by noted chef Josef Viehhauser.

The Gastwerk Hotel (67 Daimlerstrasse; 877/454-3775 or 49-40/890-620; doubles from $102)is in an old public gasworks building and houses a Terence Conran—designed suite. The hotel's other, loftlike rooms have exposed brick walls and clubby mahogany furnishings.

Europe's second-wealthiest city, Hamburg is fertile ground for great shopping.

If white's your thing, look to the Jil Sander minimalist flagship (43 Neuer Wall; 49-40/374-1290).

Savvy Petra Teufel (43 Neuer Wall; 49-40/378-6160) stocks Issey Miyake, Ann Demeulemeester, and Dries van Noten.

Bookish style fiends love to sort through the 40,000-odd art, photography, film, and design titles at Sautter + Lackmann (71—72 Admiralitätstrasse; 49-40/373-196).

Stewen's keen eye and his impressive collection of 17th- and 18th-century French antiques give Holger Stewen Interior Design (23 Hohe Bleichen; 49-40/348-470) a cult status.

Die-hard culinary types know the three pillars of Hamburg cuisine: Josef Viehhauser's nouvelle Le Canard (139 Elbchaussee; 49-40/880-5057; dinner for two from $158), the traditional Landhaus Scherrer (130 Elbchaussee; 49-40/880-1325, dinner for two $150), and Christian Rach's innovative Tafelhaus (71 Holstenkamp; 49-40/892-760; dinner for two $100). But dare to break the faith at one of Hamburg's more casual restaurants, and you won't regret it.

The genre-blending Cox (68 Lange Reihe; 49-40/249-422; dinner for two $80) is popular with the city's actors, who love the velvety, red French décor and the tasty homemade Bratwurst.

The menu at Marinehof (77 Admiralitätstrasse; 49-40/367-655; lunch for two $35) offers classic German dishes—potato salad, milk rice—along with curries from India and Thailand. Tafelhaus's chef, Christian Rach, has opened Restaurant Engel (Klein-Flottbeck, Elbchaussee/Teufelsbruck; 49-40/824-187; dinner for two from $65), a smaller low-key fusion restaurant on the lazy, park-lined portion of the Elbe River.

The new design-driven seafood restaurant Au Quai (145 B—D Grosse Elbstrasse; 49-40/3803-7730; dinner for two $76) is farther down the Elbe on a more industrial stretch of river. Like a little interactivity with your dinner?Sit behind one of those glass walls: you'll feel close enough to reach out and touch the passing cargo ships.

The stalwart Wollenberg (35 Alsterufer; 49-40/450-1850; dinner for two $74), a haute classic in a two-story white villa, has done away with the dress code in favor of a more laid-back vibe. Stop by for veal medallions on a bed of truffles and asparagus ragout, then stick around for a drink at its hip new nightclub.

Water dominates Hamburg's landscape, from the industrial shores of the Elbe River to two lakes, the Binnenalster and the Aussenalster, created by the damming of the river. Numerous tributaries and canals run through the city, which has more than 2,400 bridges (more than London, Amsterdam, and Venice combined). The best way to take it all in?Walk along the Elbe from Museumshafen to Teufelsbrück, scoping out busy ports and huge container vessels. The Strandperle (Am Schulberg; 49-40/880-1112) is a classic spot for a cocktail or a pint of Alsterwasser, a local brew that blends beer and lemon soda.

Hamburg designers are flourishing in up-and-coming neighborhoods. Cheeky couturiers have moved into Eppendorf, while edgy ready-to-wear designers gather in the Schanzen and Karolinen quarter, a former punk enclave gone high (or at least higher) style. Many get their start within the old city limits at Kleidermacher (1-3 Michaelisbrücke; 49-40/3751-8787), a collective in Neustadt that currently nourishes 12 artists who create funky super-graphics and outrageous feathered concoctions.

In Eppendorf: Najla Razai (21 Neuer-ABC-Strasse; 49-40/4607-0697) designs gowns and wedding dresses in the same ornate fabrics—metallics and laser-cut chiffon—as those favored by John Galliano, but at a fraction of the price. Look for Birke Breckwoldt's hats (think Ascot with attitude) in the same shop.

In the Schanzen and Karolinen quarter: The paint's barely dry on the walls of Garment (25 Marktstrasse; 49-40/410-8403), the new store from Kleidermacher alums Kathrin Müller and Ullinca Schröder. Their 40's-cut dresses are made from modern photo-print fabrics. Tobias Jopp and Stefan Harm of FKK (114 Schulterblatt; 49-40/430-3116) look to the eighties for inspiration, fashioning men's suits and women's dresses in bold neon and graffiti patterns.

Hamburg lacked an after-hours scene worthy of its stylish inhabitants until Bar Hamburg (6—8 Rautenbergstrasse ; 49-40/2805-4880) sparked a power lounge revolution with chocolate leather sofas and wenge wood details. But its star was recently dimmed by Bereuther (100 Klosterallee; 49-40/4140-6789), a restaurant-bar packed with models, artists, media moguls, and designers.

The buzzing throng at Die Welt ist Schön (4 Neuer Pferdemarkt; 49-40/4018-7888), literally translated as "The World Is Nice," often spills out of the Eames-style lounge into the David Hockney-inspired garden.

The place to dance all night is in the Kiez, especially Gum Club (13 Hamburger Berg; no phone), a hot spot where the only thing more fashionable than the surroundings is the people.