Yes, there is a hotel in the Vatican
 

To Tries2paklite - Thank you. That is the hotel I was looking for.

To funjohn - see www.romeby/paolovi

To anyone going to Rome, check it out.

Technically, this hotel is in Rome. Via Paolo VI is a street that makes up the border between Rome and Vatican City. As the hotel is on the south side of the street, it has a Rome address.

I copied and pasted the address that you gave, but it didn't pull up for me. Am I doing something wrong, or is it incomplete?

Thanks for sharing!

EBJB...Forgot the.com after romeby...add that and it will work

Grinsia is right. The hotel is in Rome. It is located immediately south of St. Peter's Square. It appears that there is a rooftop terrace that looks directly into the Square and across to the Apostolic Palace.