9-Nights Classic Nicaragua: Granada, Matagalpa & More from $3,581

Founded on the shore of Lake Nicaragua in 1524 by Francisco Fernandez de Cordoba, Granada, Nicaragua, is the nation's oldest city, one of the oldest cities in the New World and foremost attraction for tourists from around the world.

Granada is the cleaner, better renovated and grander of Nicaragua's two colonial towns (the other being Leon). It's also superbly situated at the base of Mombacho Volcano and along the northern shore of huge Lake Nicaragua. It's also located within one hour of several noteworthy excursions to volcanoes, crater lakes, artisan villages, nature reserves and the nearby cities of Managua and Masaya. Thus, Granada makes a great base for visiting many of Nicaragua's main attractions.

Granada has two main streets, divided in their centers with greenery: Calle la Calzada leads from the main plaza and cathedral down to the lake's edge. For several blocks near the plaza it is lined by upscale restaurants, cafes, bars and shops. This is one of two major nightlife areas in town. Calle Real Xalteva heads west from La Merced Church uphill to Fortaleza de Polvora, passing upscale shops, two significant churches and a lovely park full of stone columns and greenery.

Located in northwestern Nicaragua, about 90 minutes northwest of the capital city, Managua, and just 12 mi/20 km from Pacific coast beaches, Leon, Nicaragua, was first established in 1524, though it was destroyed in an earthquake in 1610 and rebuilt in a different spot. To the north and east of Leon are several prominent volcanoes.

Leon served as the capital of Nicaragua throughout most of the Spanish colonial period until 1857 and was the center of politics, education, culture and religion. As a result, the Spanish built many grand government buildings, Catholic churches and city blocks full of smaller colonial buildings. Thousands of original colonial buildings fill the city—many have been restored and others are still undergoing restoration.

Universidad Nacional Autonomo de Nicaragua (UNAN), Nicaragua's first and most important university, is located on a huge leafy campus just south of the city center. Today, the city has a large university population and is considered the intellectual capital of Nicaragua. Long Nicaragua's liberal hub, Leon was one of the strongholds of the anti-Somoza forces during the revolution. The Sandinistas still remain a powerful force in the city.

For a glimpse of Leon's revolutionary spirit, visit the monument to the "Martyrs of the Revolution" across from the cathedral, where a fascinating mural portrays the history of Nicaragua, from pre-Columbian times through the present. Other colorful murals can be seen throughout the city, along with pro-Sandinista graffiti.

One of the city's greatest attractions is its spirited street life: Mariachi bands and marimba players often stroll the streets. Children often go door to door with 10-ft-/3-m-tall puppets, reciting humorous poetry and beating on drums and trash-can covers. One fun way to observe the activity is to take a ride on the inexpensive open bus that cruises the city on warm nights.

Located well to the northeast of Managua, Matagalpa Department (state) is noted for large-scale coffee production, cooler climate and forested mountain countryside. Abundant foliage and cool weather provide a break from the heat and dust of Nicaragua's other cities. An interesting historic, cultural and economic aspect of Matagalpa is its large German population. They are descendants of the original German immigrants who started the coffee industry there in the late 1800s.

Matagalpa city, the state capital, is a rather congested place with few attractions. Perhaps worth visiting briefly are the massive San Pedro Cathedral, the small but informative Museum of Coffee, with detailed explanations in English and Spanish of the history of Matagalpa and coffee in the region, and the Museum of Commandante Carlos Fonseca, one of Nicaragua's main revolutionary heroes.

Matagalpa's other attractions lie outside the city in small nature reserves and coffee plantations. Most visitors prefer to stay outside the city at small ecolodges and resorts in the mountains.