Five kilometers east of Panajachel is the quaint lakeside village of Santa Catarina Palopó, a collection of adobe houses with tin and thatched roofs built into the surrounding hillsides. The streets near the church and the road leading to the lakeside are excellent places to pick up some of the colorful textiles and handicrafts produced here. Many of the villagers still sport the traditional attire.

As elsewhere on Lake Atitlán, many well-to-do Guatemalans (and increasingly, foreigners) have bought property and built houses on the slopes just outside of town.