Quito is a breathtaking city – in every way. At 2,850m above sea level, San Francisco de Quito (to give Ecuador's little capital its full name) is far higher than the average Alpine ski resort. Its historic quarter presents glorious churches and monasteries, cobbled old squares and steep narrow streets. The city lies at an important meeting point of traditional trading routes, hence it was developed by the Incas and then by the Spanish. Its setting is spectacular. The city isn't simply surrounded by mountains; it huddles below volcanoes – with Volcan Pichincha occasionally puffing out smoky ash to the west. Locals agree that seismic factors make this a pretty irrational location for a major urban centre. As a result, they say, there's a laid-back, live-for-the-day vibe.
The majority of residents live in the north of the long, narrow city. For, lovely though the old town in the south is, 10 years ago most people avoided it because it was so run down. The regeneration of historic Quito is ongoing and has seen major restoration of a number of architectural gems of the Spanish colonial period. Start your slice through this atmospheric district at the most dazzling of them, La Compania (00 593 2 258 4175; ficj.org.ec), the baroque church that the Jesuits built between 1605 and 1765. The grandeur of the volcanic stone reflects the might of this religious order. The interior is an astonishing extravaganza of gilt and spatial artistry. But the Jesuits were already too powerful when they devised it. Two years after they completed La Compania, the order was expelled from the Americas.
From religion to politics: Plaza de la Independencia is a few steps east of La Compania. The neo-classical Presidential Palace (00 593 2 382 7000; www.presidencia.gob.ec) on the western side is Ecuador's seat of government and is open to visitors on weekdays. But it's the flower-filled square in front that will absorb your attention. Complete with seminal Independence Monument (Quito staged South America's first mass uprising against the Spanish in 1809), this is the very heart of the city and crowds hang out here, listening to live music.
The gleaming white cathedral on the southern side looks imposing, but there are other more impressive churches to explore. So make your way two blocks south to Plaza Santo Domingo. Here the eponymous church (00 593 2 228 2695), built by Dominican monks in the 1580s, has a fine Moorish-style ceiling and an exuberantly glittering Lady Chapel.
Behind the square, at Montufar 352, you'll find one of the most appealing sites of the revived old town. A former maternity hospital now houses Escuela Taller (00 593 2 295 1772), a craft school teaching traditional skills from carpentry to gilding. Pay an entrance fee of US$2 (£1.20) and you can wander the studios chatting to diligent apprentice stonemasons, guitar makers and more.
Stroll a block further south again and you'll reach La Ronda, recently reclaimed as a picturesque street of boho panache. You could stop at one of La Ronda's cafés for a quick lunch of pasty-like empanadas (try Café Tempu at number 84). But for a real treat head to Plaza San Francisco nearby where Casa Gangotena (00 593 2 400 8000; casagangotena.com) is a sublime new hotel whose restaurant, masterminded with great skill by chef Andres Davila, is rapidly earning a reputation as the very best place to eat in the city. Davila's soups, crafted from Ecuadorian traditions, are especially good.
Newly fortified, take a postprandial walk around Plaza San Francisco and call in on the magnificent church and monastery museum here (00 593 2 228 1124). Founded in 1536, it is still home to about 50 monks, some of whom you might see as you tour the cloisters, explore the sculpture gallery and gaze in awe at the splendid nave of the San Francisco church, glinting with lashings of gilt.
Just around the corner, at Calle Cuenca 335, Casa del Alabado (00 593 2 228 0940; alabado.org) presents pre-Colombian riches. Beautifully restored and revamped, this 17th-century townhouse opened as a superb archaeological museum last year and features fabulous effigies of spirits, ancestors, witch doctors and more.
Move on to reach San Francisco covered market – at the junction of Rocafuerte and Chimborazo streets – before it closes at 3pm. Quite apart from the wondrous fruit and veg here, this relatively small market boasts a great herb section whose stalls offer traditional limpia treatments. Who would think that being rubbed with herbs and flowers would make you feel marvellous? But that, essentially, is what this ancient Andean answer to a massage is all about. Limpia market sessions cost about US$3 (£1.90); alternatively some hotels will organise treatments in the privacy of your room. Either way you'll feel as revived as Quito's lovely old town.
Access to Quito is being revolutionised. Currently this is one of the world's most challenging cities to fly into: located in the midst of the city and surrounded by mountains Mariscal Sucre airport was built 52 years ago and has been unable to expand to cope with today's larger aircraft and greater air traffic. A new airport about 10 times larger, and 18km east of the centre, has been under construction since 2006 and is due to be completed in February.
La Casona de la Ronda (00 593 2 228 7538; lacasonadelaronda.com) is a charming guesthouse that opened earlier this year on increasingly happening La Ronda. Set in a 17th-century townhouse it offers 22 bedrooms and a rooftop bar with great views. Doubles cost from US$180 (£113), including breakfast.
Join the party by heading to Quito for the first week of December. Fiestas de Quito is a week of celebrations, ending on 6 December, which celebrates the founding of the colonial city in 1534 with bands, street music and much colour (more information on quito.com).
Harriet O’Brien travelled with Audley Travel (01993 838635; audley.co.uk) on a tailor-made trip to Ecuador. A 10-day holiday, taking in Quito as well as cloud forest and hacienda trips, costs from £3,095 per person. The price includes flights from Heathrow on Iberia via Madrid, three nights at Casa Gangotena, all other accommodation and travel within Ecuador.
Casa Gangotena (00 593 2 400 8000; casagangotena.com). Doubles from US$375 (£234) including breakfast.