The fascinating town of Matera, in southern Italy's Basilicata region, is one of Italy's most unique towns and one of my favorites. Matera is really divided into two parts, the 13th century town and the sassi district, a ravine with ancient cave dwellings and rock-cut churches. A good way to start your visit is with a guided tour of the Cave World of Matera that can be booked in advance through Select Italy.
Matera is especially picturesque at night and the upper town is lively. A good place to stay is Locanda di San Martino Hotel and Thermae (read review), right in the Sassi district, where you can relax in the thermal pool after exploring the sassi, or see these Matera Cave Hotels for more places to stay in the sassi. If you're looking for luxury try Palazzo Gattini, a 5-star hotel in a 17th century villa with views of the sassi.
Matera Sassi Photo © 2010 by Martha Bakerjian