The highway northeast of Rio de Janeiro rumbles past forests and waterfalls en route to a mountain town so refreshing and picturesque that Dom Pedro II, Brazil's second emperor, moved there with his summer court. From 1889 to 1899 it was the country's year-round seat of government. Horse-drawn carriages clip-clop between the sights, passing flowering gardens, shady parks, and imposing pink mansions. Be sure to visit
the Crystal Palace and the Gothic cathedral, São Pedro de Alcântara. The city is also home to the Encantada—literally "Enchanted"—the peculiar house created by Santos Dumont, an inventor and early aviator. Fashion-conscious bargain hunters from across Rio de Janeiro State generally make a beeline for Rua Teresa, a hilly street just outside the historic center that's lined with discount clothing stores.