With advance reservations you can treat yourself to some fine dining, at the restaurant at La Mirage. You can also get great meals at Casa Mojanda and Hacienda Cusín.
If you're looking for somewhere with a view, I suggest dining at a restaurant overlooking Lago San Pablo, a beautiful little lake considered sacred by the local indigenous populations. The restaurant of the Hostería Puerto Lago (tel. 06/2920-920; www.puertolago.com; Lago San Pablo and Pan-American Hwy., Km 5 1/2, Otavalo) sits right on the lake and serves delicious fresh grilled trout in addition to the usual Ecuadorean and Continental offerings. Almost every table has a lake view with magnificent Volcán Imbabura in the background. The restaurant is open Sunday to Thursday 7:30am to 9:30pm and Friday, Saturday, and holidays 7am to 10:30pm.
Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.