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130km (81 miles) N of Managua; 230km (143 miles) N of León

Enjoy a cup of the finest coffee in the world while admiring this distinctive valley city and its surrounding green hills. The "Pearl of the North" has steep, hilly streets and clean mountain air, and is settled by 80,000 Norteños who occupy themselves mostly with cattle or coffee beans. Though it's not the tidiest of towns, it nevertheless has a rural charm and is comfortably nestled along a narrow, unassuming stream called the Río Grande de Matagalpa -- actually Nicaragua's second-longest river, which flows the whole way to the Caribbean.

Matagalpa was first settled by the Nahuatl Indians, and though the Spanish introduced cattle in the 17th century and the Germans introduced coffee in the 19th, they both originally came here looking for gold. While gold wasn't discovered, the city became a coffee boomtown and important economic center for the country. Such fortune has waned a bit since the drop in the price of beans. This town is also the birthplace of the greatest Sandinista, Carlos Fonseca, and the resting place of the much-loved juggling volunteer Benjamin Linder. In addition to boasting great shops selling local black ceramics and coffee farms primed for visitors, Matagalpa makes a good base for nearby treks in the beautiful tropical forest; it's also the last stop before the famous Selva Negra Mountain Resort.