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Beautifully positioned on a sandy bay, Montezuma is hemmed in by a precipitous wooded shoreline that has prevented the overdevelopment that has affected so many other beach towns. Its small, funky town center is a pastel cluster of New Age health-food cafés, trendy beachwear shops, jaunty tour kiosks, lively open-air bars and restaurants and, at last count, three ice-cream shops, two selling Italian gelato. Most hotels are clustered in or around the town's center, but the best ones are on the coast to the north and south, where the loudest revelers are the howler monkeys in the nearby forest. The beaches north of town, especially Playa Grande, are lovely.

Montezuma has been on the international vagabond circuit for years, attracting backpackers and alternative-lifestyle types. Yoga is a main attraction, with a wide range of classes, and the town is becoming more of a cultural draw, with a low-key film festival of shorts and documentaries, and an occasional poetry festival. At night, the center of town often fills up with tattooed travelers and artisans who entertain each other and passersby. When college students are on break, the place can be a zoo. People used to jokingly refer to the town as “Monte-fuma” (fuma means "smoke" in Spanish—get it?) but, for better or for worse, Montezuma is being tamed and becoming more civilized and attractive, with plenty of grown-up lodging and dining options to choose from.

North and south of the town center have always been quiet, and the attractions here include swaths of tropical dry forest, waterfalls, and beautiful virgin beaches that stretch across one national park and two nature preserves. One especially good walk (about two hours) or horseback ride leads to a small waterfall called El Chorro that pours into the sea, where there is a small tidal pool at lower tides.

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