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389km (241 miles) NW of La Paz; 533km (330 miles) N of Cabo San Lucas; 1,125km (698 miles) SE of Tijuana

Little Loreto sits so unassumingly on the edges of its bay that it's easy to forget its historical importance. Loreto was the center of the Spanish mission effort during colonial times, the first capital of the Californias, and the first European settlement in the peninsula. Founded on October 25, 1697, it was Father Juan María Salvatierra's choice as the site of the first mission in the Californias. (California, at the time, extended from Cabo San Lucas to the Oregon border.) He held Mass beneath a figure of the Virgin of Loreto, brought from a town in Italy bearing the same name. For 132 years, Loreto served as the state capital, until an 1829 hurricane destroyed most of the town. The state capital moved to La Paz the following year.

During the late 1970s and early 1980s, the Mexican government saw in Loreto the possibility for another mega-development along the lines of Cancún, Ixtapa, or Los Cabos. It invested in a golf course and championship tennis facility, modernized the town's infrastructure, and built an international airport and full marina facilities at Nopoló, 26km (16 miles) south of town. The economics, however, didn't make sense at the time, and few hotel investors and even fewer tourists came. A new timeshare development out of town seems far from the shot in the arm that Loreto's tourism anticipated; so far, the only discernable effect on the town is the timeshare salesmen annoying locals and visitors. And so Loreto, rather than becoming the next "new" destination, remains as it has been -- at its heart, a pretty simple fishing town with a historic center and a very beautiful bay.

But its simplicity is its appeal. There's no high culture here, and no mainstream tourism, and it's easy to find a place to be by yourself on the sand or the waves. Recently, Loreto has received international accolades as a top new destination -- and it's easy to see why. The Sea of Cortez and its offshore islands are teeming with wildlife -- whales, dolphins, giant grouper, sea turtles -- and the deserted crescents of turquoise in every cove are some of Baja's most secluded beaches. The natural port of Puerto Escondido shelters a growing yachting community; and the area is so lovely that most of the sailboats stay put year-round. Fishermen pull in big-game catches all year, kayakers launch here for trips to Isla del Carmen and Isla Danzante, or down the remote mountain coast to La Paz, and history buffs, birders, and desert campers head for the mountains to visit some of the oldest Jesuit missions and the ranch communities that still inhabit them. It's no wonder the American and Canadian expats who settled in here decades ago want to keep the place a secret -- it's still one of Baja's best.