Because so many hotels are scattered about the Urubamba region, and somewhat isolated, many guests, especially at the upscale accommodations in the region, dine at their hotels; the major ones listed above (Casa Andina, Libertador, and Sonesta) all have very good restaurants. Perhaps best for drop-ins is the fine -- but pricey for the area -- restaurant of Sol y Luna Lodge & Spa. Its restaurant Wayra is a two-story space with an open fireplace and pub on the second floor, and it serves very nicely prepared criollo and Nouveau Andean specialties, including ají de gallina (spicy, creamy chicken) and stuffed river trout, as well as fresh pastas. The restaurant's new incarnation has gone very upscale and gourmet, with wine-pairing dinners and the like. Call for reservations because the restaurant is often full with hotel guests.
However, easily the best and coolest restaurant in the Urubamba area is right in town: El Huacatay, Jr. Arica 620 (tel. 084/201-790; www.elhuacatay.com), popular with both wealthier Peruvians and visiting gringos. A few blocks from the main square, this surprising gourmet restaurant, in an old home built around a garden set back from a nondescript Urubamba street, is the perfect place for a long, relaxing lunch on the patio under bamboo shade or a more elegant dinner in the warm, intimate dining room (which has only five tables) or brightly colored lounge area. Run by a Peruvian chef, Pío, and his German wife Iris, the restaurant's chef-driven menu is a bit of a rarity in these parts, and it focuses on Andean specialties, such as quinoa soup, alpaca lasagna, and coca-infused (but street-legal!) gnocchi. Portions are large and attractively presented, and although fairly priced for the setting, service, and quality, the restaurant is more upscale than most in the area. Open Monday to Saturday from 2 to 10pm, the restaurant accepts only cash and Visa cards; reservations on weekends and evenings are recommended.
Another unique Valle restaurant for fine dining is Huayoccari Hacienda Restaurant, Carretera Cusco-Urubamba, Km 64 (tel. 084/962-2224 or 084/226-241 in Cusco), several miles southeast of Urubamba. The restaurant, in an exceedingly elegant farmhouse high in the hills above the Sacred Valley, is tough to make reservations at and hard to find. (It works almost exclusively with tour agencies such as Lima Tours, tel. 01/424-5110, to arrange lunches and dinners; if you're not with a group, it's worth having your hotel call to see if it's possible to get in and get directions.) The $35 (cash only) prix-fixe menu starts with a pisco sour in the antique-filled common room or out among the gardens. Then diners, who feel as though they belong to an exclusive club, are admitted to the wood-paneled dining room -- which has large picture windows framing views of the Andes -- for a simple but well-prepared meal of local vegetables, soups (such as crema de maiz), and fresh river trout. The place is rather emphatically designed to feel like one is a guest in the home of a local agricultural patron (and in fact, the home and restaurant belong to the Orihuela family, one of the valley's most distinguished, and oldest, families).
Several restaurants are scattered about the main valley highway and cater to groups that storm through the Sacred Valley three times a week on market day. Tunupa, Km 77, Carretera Pisaq-Ollantaytambo (on the left side of the road on the way to Ollanta; tel. 084/963-0206), owned by the same folks who own the restaurant of the same name in Cusco, is one of the most popular. In a massive, purpose-built hacienda with long corridors that form dining halls overlooking the Urubamba River, it's something akin to a Peruvian bier hall. It must seat at least 300 diners, and it's all buffet, all the time. Even though it can get crowded on market days at lunchtime, it's a fair value for an all-you-can-eat buffet for $15, including a pisco sour. Even better is Alhambra, Ctra. Urubamba-Ollantaytambo s/n (near Hotel Sol y Luna; tel. 084/201-200), also a hacienda-style restaurant targeting bus tours, but in a more relaxed and intimate manner. The dining rooms are smaller, and there are tables outdoors under a thatched roof, with lovely garden and mountain views. Its buffets are only on market days (Tues, Thurs, and Sat). At other times, the three-course menu turístico ($15) is excellent; choose main courses such as stuffed lake trout with quinoa in a nut sauce.
On the main road going toward Yucay, Quinta Los Geranios, Av. Cabo Conchatupa s/n (tel. 084/201-093), is a pretty good open-air restaurant set around a garden. It gets hit midday with tour buses but still manages to concoct fine versions of Peruvian standards such as rocoto relleno (stuffed hot peppers) and a number of indigenous soups. The three-course lunch menu is a good value. A similar tourist-group restaurant across the street is El Maizal, Av. Cabo Conchatupa s/n (tel. 084/201-054); it offers a buffet lunch and has both indoor and outdoor seating.
In Urubamba itself, The Muse Too, Plaza de Armas (at the corner of Comercio and Grau; tel. 084/201-280), a sister establishment of the San Blas bar The Muse, in Cusco, is a low-key two-story pub/restaurant with a single corner balcony upstairs. It features good soups, sandwiches, and lasagna, as well as breakfast all day. At night, it operates more as a bar than restaurant, focusing on its long list of martinis and specialty drinks. For good pizzas from a wood-fired oven and pastas, or cocktails downstairs, try The Green House (not related to the inn), Jirón Arica at Comercio (no phone; www.greenhouseurubamba.com).