Paraty is not a wild party town (that's Búzios). The crowd's a bit older, the nightlife more laid-back. Enjoy some live music, have some drinks, and chat with the other folks who are quite likely visiting as well.
One of the more popular live-music venues is the Café Paraty, Rua do Comércio 253 (tel. 024/3371-2600). It bills itself as a restaurant -- and the food is pretty decent -- but the place really gets hopping later in the evening, after 10pm or so. The restaurant has a small stage and the excellent bands usually play covers of popular Brazilian music. Daily 9am to midnight.
Another popular spot in the evenings is Porto da Pinga, Rua da Matriz 12 (tel. 024/9907-4370). This bistro specializes in local cachaças. Live music nightly; a great spot to go and try some of the regionally produced firewater. Should you find one you particularly like, you can pick up some extra to take home from their on-site cachaçaria. Another restaurant doing double duty as a bar is the Margarida Café, Praça do Chafariz (tel. 024/3371-2441). On weekends, there is always live Brazilian music, a perfect spot to enjoy a nightcap after dinner.
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.