At first glance, Puerto Escondido, 200 miles southwest of Oaxaca, looks like one enormous ocean-view lot tucked into the elbow of a huge bay. But it's not the view that makes it special, it's the waves off Zicatela Beach, a five-minute walk south of town. Surfers call it the Mexican Pipeline, home of the most reliable tube rides in the world: great bone-crunching, board-snapping, spray-spitting tunnels of doom that snap down into the rippled sand-bar bottom like a cat catching a mouse. Winter waves regularly reach six feet or more and are so powerful that shapers make boards strengthened specifically for this break.
The less turbulent Playa Marinero, the town's main beach, is better suited for bodysurfing. Snorkeling is best at waveless El Angelito, a five-minute, $1 boat ride to the north side of the bay. You'll see octopuses, barracuda, and lots of snappers; snorkeling equipment can be rented right on the beach for about $2 a day.
Puerto Escondido has a distinctly Italian flavor--reportedly there's even a retired Red Guard terrorist living in town, having traded in knee-capping for cappuccino-sipping at one of the espresso joints that front Pérez Gazga, the short, red-bricked main street of downtown. This three-block section of "new" Puerto Escondido is where you'll find all the restaurants and nightlife. La Perla Flameante has the best seafood (lightly handled and so fresh it's still quivering). If you go out fishing (arrange for a guide through your hotel, about $15 an hour, three-hour minimum), you can have the restaurant cook your sailfish, bluefin tuna, or whatever you catch. Il Capuchino is known for its great coffee as well as its incredible avocado pie, better even than the pie de limón, a local specialty.
A number of surf-dude hammock hotels are strung along Zicatela and range in comfort and price from about $6 a night for the bare essentials (a roomful of hammocks, shared bath) to $15 for more civilized surroundings (a fan, a bed, your own bath). Rockaway Surfer Village on Zicatela Beach (doubles, $12-$18; 958-2-0668) has a pool, a well-equipped surf shop (where you can rent everything you need for about $4 an hour), rooms with fans and mosquito netsand it's stumbling distance from the break. For more upscale lodging, there's only one choice: The Santa Fe (doubles $75; 958-2-0170), at the northern end of Zicatela Beach, has air conditioning, a pool, and a restaurant/bar overlooking the beach.