The Spanish founded Montevideo in 1764 on the east side of the Río de la Plata as a buffer against Portuguese expansion from the north. That role endures: Uruguay is known as the Switzerland of South America, the neutral party between Brazil and Argentina, its bigger neighbors. But unlike Switzerland, Uruguay struggles: The CIA World Factbook lists it as 80th on a list of 229 countries with per-capita income at $16,600 (Switzerland is No. 11 at $54,800). Also, because Uruguay's soccer season parallels the European season, European teams are known to hire away the country's best players in midseason.
Must-see: The Ciudad Vieja (Old City) is home to ornate colonial buildings. Walk east to the Mercado de los Artesanos for handmade jewelry, ceramic candleholders and other upscale crafts (1365 Plaza Cagancha). Barrio Reus, a mid-20th century neighborhood, looks as though sprites could appear from the yellow, blue, orange, rose, teal and lavender two-story townhomes with delicate arched doorways in contrasting hues. Stroll along Las Ramblas, a walking and biking path that runs past 11 city beaches. Two blocks from Playas de los Pocitos beach, 62 Bar serves Fernet-Branca, a bitter liqueur first produced 170 years ago as a stomach tonic (3301 Miguel Barreiro corner of Chucarro; 011-598-2707-3022, www.62bar.com.uy).
The soccer scene: The major teams are Nacional, which plays in Parque Central, and Peñarol, which plays in Estadio Centenario. That stadium was built to host the first FIFA World Cup championship in 1930, which Uruguay won. Peñarol is building a modern stadium. During the World Cup, Montevideo's Palacio Municipal (City Hall) installs a huge TV screen on its plaza so locals can watch Uruguay's games.
Beware: As in all cities, be careful in the port area, especially after dark. Police are seeing more smash-and-grab burglaries in which thieves shatter car windows and grab purses or cellphones on car seats.
Best time to go: Soccer season is August to May. To enjoy a cooler climate and to see the best players before they're hired by European teams, visit in September or October. For other activities, summer — December through March — is the most pleasant time of year, but the city can be humid.