Trancoso

Smaller than its northern neighbors Arraial and Porto Seguro, Trancoso moves at a much slower pace. Founded by Jesuit missionaries in 1586, its first name was St. John Baptist of the Indians. Life here circles around the downtown plaza called "Quadrado" (the Square), where pedestrians have the right of way—no cars allowed. This is where everybody goes for shopping, dining, and people-watching. In recent years Trancoso has become a boomtown of sorts, and a haven for high-society Brazilians from São Paulo, especially. As a result, it now has several upscale developments, such as the Club Med and a US$90-million 18-hole golf course.