388km (241 miles) S of Cusco; 297km (185 miles) NE of Arequipa; 1,011km (628 miles) SE of Lima

Puno, founded in the late 17th century following the discovery of nearby silver mines, is a ramshackle town that draws numbers of visitors wholly disproportionate to its innate attractions. A mostly unlovely city on the altiplano, a high, wind-swept plateau, it has one thing going for it that no other place on earth can claim: Puno hugs the shores of fabled Lake Titicaca, the world's highest navigable body of water, a sterling expanse of deep blue at 3,830m (12,566 ft.) above sea level. South America's largest lake (8,500 sq. km/3,282 sq mi.), Titicaca is also the largest lake in the world above 2,000m (6,560 ft.). The magnificent lake straddles the border of Peru and Bolivia; many Andean travelers move on from Puno to La Paz, going around or, in some cases, over Lake Titicaca.

Before leaving Puno, though, almost everyone hops aboard a boat to visit at least one of several ancient island-dwelling peoples that seem to have materialized straight out of the pages of National Geographic. A 2-day tour takes travelers to the Uros Floating Islands -- where Indian communities consisting of just a few families construct tiny islands out of totora reeds -- and two inhabited natural islands, Amantaní and Taquile. A special bonus, for travelers who have the time and the funds, is a visit to the lake's only private island, Suasi, home to a luxury ecolodge.

To many Peruvians, Lake Titicaca is a mystical and sacred place. Manco Cápac, the original Inca chieftain believed to be a direct descendant of the sun, is said to have risen from the lake's waters along with his sister to found the Inca Empire. The Uros Indians might remain on their floating islands because they believe themselves to be lake people by birth, the very descendants of the royal siblings.

Puno has one other thing in its favor. Though dry and often brutally cold, the city is celebrated for its spectacular festivals, veritable explosions of cultura popular. The unassuming town, where locals largely descended from the Aymara from the south and the Quechua from the north, reigns as the capital of Peruvian folklore. Its traditional fiestas, dances, and music -- and consequent street partying -- are without argument among the most vibrant and uninhibited in Peru. Among those worth planning a trip around are February's Festival de la Virgen de la Candelaria (Candlemas) and Puno Week, celebrating the birth of the city and the Inca Empire, in early November.