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The storied capital of the Inca Empire and gateway to the imperial city of Machu Picchu, Cusco (also spelled Cuzco) is one of the undisputed highlights of South America. Stately and historic, with stone streets and building foundations laid by the Incas more than 5 centuries ago, the town is much more than a mere history lesson; it is also surprisingly dynamic, enlivened by throngs of travelers who have transformed the historic center around the Plaza de Armas into a mecca of sorts for South American adventurers. Yet for all its popularity, Cusco is one of those rare places -- perhaps like Bali, Katmandu, or Prague -- that seems able to preserve its unique character and enduring appeal despite its growing prominence on the international tourism radar.

Cusco looks and feels like the very definition of an Andean capital. It's a fascinating blend of pre-Columbian and colonial history and contemporary mestizo culture. The Incas made Q'osqo (meaning "navel of the world" in Quechua) the political, military, and cultural center of their empire, which stretched up and down the Andes, from Ecuador through Bolivia and all the way to Chile. Cusco was the empire's holy city, and it was also the epicenter of the legendary Inca network of roads connecting all points in the empire.

The Spanish conquistadors understood that it was essential to topple the capital city to take control of the region, a feat they ultimately accomplished after an epic battle at Sacsayhuamán. The Spaniards razed most Inca buildings and monuments, but, in many cases, they found the structures so well engineered that they built upon the very foundations of Inca Cusco. Many perfectly constructed Inca stone walls, examples of unrivaled stonemasonry, still stand. After a devastating earthquake in 1650, Cusco became a largely baroque city.

The result is a city that showcases plainly evident layers of history. Cusco's highlights include both Inca ruins -- such as Sacsayhuamán, a seemingly impregnable fortress on a hill overlooking the city, and Qoricancha, the Temple of the Sun -- and colonial-era baroque and Renaissance churches and mansions. The heart of the historic center has suffered relatively few modern intrusions, and despite the staggering number of souvenir shops, travel agencies, hotels, and restaurants overflowing with visitors, it doesn't take an impossibly fertile imagination to conjure the magnificent capital of the 16th century.

Today Cusco thrives as one of the most vibrant expressions of Amerindian and mestizo culture anywhere in the Americas. Every June, the city is packed during Inti Raymi, the celebration of the winter solstice and the sun god, a deeply religious festival that is also a magical display of pre-Columbian music and dance. Thousands trek out to Paucartambo for the riveting Virgen del Carmen festival in mid-July. Other traditional arts also flourish. Cusco is the handicrafts center of Peru, and its streets and markets teem with merchants and their extraordinary textiles, many hand-woven using the exact techniques of their ancestors.

Spectacularly cradled by the bold southeastern Andes Mountains that were so fundamental to the Inca belief system, Cusco sits at a daunting altitude of 3,400m (11,000 ft.). The air is noticeably thinner here than in almost any city in South America, and the city, best explored on foot, demands arduous hiking up precipitous stone steps, leaving even the fittest of travelers gasping for breath and saddled with headaches and nausea. It usually takes a couple of days to get acclimatized before moving on from Cusco to explore the mountain villages of the Urubamba Valley (also known as the Sacred Valley), the Amazon basin, and, of course, Machu Picchu, but many visitors find Cusco so seductive that they either delay their plans to explore the surrounding region or add a few days to their trip to allow more time in the city. Increasingly, travelers are basing themselves in one of the lower-altitude villages of the Sacred Valley, but there is so much to see and do in Cusco that an overnight stay is pretty much required of anyone who hasn't previously spent time in the area.

Cusco's beautiful natural setting, colorful festivals, sheer number of sights -- unparalleled in Peru -- and facilities and services organized for travelers make it the top destination in Peru and one of the most exciting places in South America. It is loaded with good and, in many cases, inexpensive restaurants, hostales (inns), and lively bars that cater to enthusiastic crowds of young and old gringos outfitted with the latest in fleece wear, backpacks, and hiking boots. For the burgeoning crowd that comes to Peru to do justice to all that high-tech adventure gear, superb trekking, river-rafting, and mountain-biking opportunities abound throughout the Sacred Valley.

As well as Cusco seems to handle the burden of its popularity -- which seems to increase steadily year by year -- for some travelers, the incessant hawking of postcards, cigarettes, restaurants and travel agencies, and hordes of gringos who look just like they do can be a bit overwhelming. Those looking for a more peaceful introduction to the Andes might choose to spend more time in the Sacred Valley. As much as I love Cusco, every time I visit, I find the city just a tiny bit more overwhelmed by its tourist industry. Although resilient Cusco is not yet Marrakech in terms of hassles and sensory overload, it might be headed there.

The positive side of the equation, of course, is the vital role that tourism plays in propping up the local economy. Cusco is one of the only provinces in Peru that is not mired in economic crisis. Cusqueños are understandably pleased to receive international visitors and are remarkably forgiving of their excesses, but many locals quietly voice concerns about being pushed out of the city while they watch every last colonial house give way to yet another hotel, cafe, or dance club.

Cusco = Cuzco = Q'osqo -- Spanish and English spellings derived from the Quechua language are a little haphazard in Cusco, especially because there has been a linguistic movement to try to recuperate and value indigenous culture. Thus, you might see Inca written as Inka; Cusco as Cuzco, Qosqo, or Q'osqo; Qoricancha as Coricancha or Koricancha; Huanchaq as Huanchac or Wanchac; Sacsayhuamán as Sacsaywaman; and Q'enko as Qenko, Kenko, or Qenqo. You're likely to stumble across others, with similar alphabetical prestidigitation, all used interchangeably.