This quiet town, a few kilometers east of Urubamba , consists of a large, grassy plaza where soccer games are played in the shade of two massive pisonay trees reputed to be 450 years old. Various colonial homes, now hotels, front the square along with the restored colonial church of Santiago Apóstol.
On the far end of the square, near the highway, lies the adobe palace of Sayri Túpac, who settled here after emerging from Vilcabamba in 1558. Away from the main square lie quiet, dusty streets and extensive Inca terracing on the hillsides near town. There are few services outside the hotels clustered around the square.
The unpretentious Hostel Y’llary (Plaza Manco II 107, tel. 084/20-1112, US$27 s, US$33 d with breakfast) has rustic, large rooms with high ceilings and comfortable beds. The views from the flower garden are amazing, and it is also possible to pitch a tent in the yard (US$5 pp).
The luxurious Sonesta Posadas del Inca (Plaza Manco II, Yucay 123, tel. 084/20-1107, www.sonesta.com , US$94–170s, US$99–180d, prices depend on season and come with breakfast) is like a small village with rooms spread out among plazas and gardens, courtyard fountains, a miniature crafts market, and a chapel.
The hotel is built around the charming 16th-century Santa Catalina de Sena monastery, where 21 rooms are located. The modern, though colonial-style, building next door has another 40 rooms or so with high ceilings, cable TV, lock boxes, and bathrooms with tubs. Amenities include a nice restaurant (US$15 lunch buffet), jewelry shop, ATM, and a full spa. Even if you don’t stay here, stop in and see the excellent museum, which has a range of ceramics, quipus, and weavings from most of Peru’s cultures, from the Chavín to the Inca.
The well-decorated La Casona de Yucay (Plaza Manco II 104, tel. 084/20-1116, www.hotelcasonayucay.com , US$85 s, US$105 d with breakfast) is a colonial hacienda that has been converted into a hotel with large rooms and great views. The colonial sitting room is elegant, though the gardens need some work.
The Sacred Valley ’s best-kept gastronomical secret is Huayoccari Hacienda Restaurant (Km 64 Pisac–Ollantaytambo highway, call for directions beforehand, tel. 084/22-6241 or cell 084/962-2224, hsilabrador [at] latinmail [dot] com, US$45 pp). This elegant gourmet retreat, two kilometers up a dirt road near Yucay, is a converted country manor perched high on a ridge overlooking the Sacred Valley. Past a rustic courtyard, the restaurant’s walls are lined with colonial paintings, altars, and ceramics collected by José Ignacio Lambarri, whose family has owned the land and nearby hacienda for more than three centuries. The garden terraces offer dazzling views, and digestive walks past roses and fuchsias to Inca terraces and some of the most fertile farmland in Peru.
Apart from its privileged location, Huayoccari has the most sophisticated cuisine in all of Cusco . It is completely organic and, best of all, based on the hacienda’s original recipes. Lunch begins with sara lagua, a cream soup made of local white corn, fresh cheese, and the herb huacatay. Main courses include steamed river trout with a sauce of herbs and fresh capers, or chicken rolled with fresh cheese and country bacon and covered with sauco-berry sauce. The whole meal builds toward the desserts, made of delectable fruits found only in Peru: cheesecake with aguaymanto marmalade, chirimoya meringue, or a sachatomate compote. Though off the beaten path, Huayoccari is well worth the trek for the food, the country setting, and the private collection of art. There are only a handful of tables, so make reservations well in advance. Huayoccari is between Pisac  and Urubamba  and can be reached via taxi from either town.
A more conventional option, but with a diverse menu, is Allpa Manka (St. Martin 300, tel. 084/20-1258, www.cuscofood.com , 11 a.m.–3:30 p.m. and 6–9:30 p.m. daily, US$12–15). The US$12 buffet lunch, taken in the sunny patio, with live music, can be a restful break from the go-go tourist grind.