Calle Santander and the road ringing the lakeshore are crammed with street vendors selling all sorts of Guatemalan handicrafts, ranging from clothing and other textile products to stone and woodcarvings and leather goods. There are also a fair number of stalls selling handmade jewelry and trinkets, but these are relatively run-of-the-mill works that have no real connection to the land or its people and are nothing compared to native arts and crafts.
Just uphill from the Catholic church is the main market area of Panajachel. Here you will find vendors selling fruits, vegetables, household goods, and flowers mixed in with butchers and some stalls selling arts, crafts, and textiles.
If you're looking for higher-quality pieces, check out K'frans, Calle Santander 1-83, Zona 2 (tel. 502/7762-0332), which has high-end cotton clothing for both men and women with interesting designs and excellent workmanship. For leather goods -- belts, handbags, and shoes -- try Pajayub, Calle Santander, across from Telgua (tel. 502/7762-0040).
The nearby towns of Santiago de Atitlán, Santa Catarina Palopó, and Sololá have deep and highly developed arts, crafts, and textile traditions. It's worth taking a trip to one or all of these towns to shop for the local wares. See below for more information on these towns and how to visit them. In addition, Panajachel makes a perfect base for visiting nearby Chichicastenango on market day. All of the tour operators in town offer day trips to Chichi on Thursdays and Sundays.
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.