Rio de Janeiro is not typically associated with the sort of lived-in serenity found at the end of winding cobblestone streets or among aging mansions. But, just above the heart of Rio's bustling downtown, the hilltop neighborhood of Santa Teresa offers a tranquil escape from the sexual and financial caprice of Cidade Maravilhosa, as Rio is called by her acolytes.

Named after the Carmelite convent founded there in the 1750s, Santa Teresa became the neighborhood of choice for wealthy industrialists during the 1920s, when mansions sprouted like mushrooms on the rainforest-covered hills overlooking the rapidly expanding city. A half century later, the wealthy fled to the suburbs as urban blight struck and favelas began encroaching on the neighborhood's borders. Then, in the 1960s and 1970s, artists, writers, and musicians moved into the dilapidated area, restoring some of the aging houses and breathing new life into the neighborhood. They opened studios and hosted creative events – Afro-Brazilian drumming in the streets, kitschy Carnaval fests – that gave the district a reputation for being vibrant, edgy, and artsy. The revitalization is ongoing: A growing number of upscale B&Bs and Rio's finest boutique hotel have opened their doors here in the past few years.

Highlights of the neighborhood include the Parque das Ruinas, which contains the burned-out shell of a mansion that once belonged to Brazilian heiress Laurinda Santos Lobo, the center of Rio's intellectual scene in the 1930s. Left in ruins, the old brick exterior has metal walkways that ascend to a cupola with fine views over Guanabara Bay and Leblon. Next door is the Museu Chácara do Céu, with a small but well-curated collection of artwork, including pieces by acclaimed Brazilian artist Di Cavalcanti and international luminaries like Matisse and Miró. Lush gardens surround the museum.

While it's a short taxi ride from Copacabana or Ipanema, to experience the magic of Santa Teresa, it's worth staying a few nights in the neighborhood at Hotel Santa Teresa, a Relais & Chateaux design hotel with an updated cocoa plantation theme. Raise a glass with local characters at the long-running Bar do Gomes, sample Amazonian cuisine at Espírito Santa, and catch Rio's best samba bands in Lapa, a neighborhood located just below Santa Teresa. And don't miss Saturday feijoada (pork and black bean stew) at Bar do Mineiro, a neighborhood classic. The caipirinhas here are tops.

The best time to visit is during the annual Portas Abertas festival in July, when Santa Teresa's artists open their studios to the public, and wild installations cover the neighborhood. Music, food, and a colorful crowd add to the neighborhood's customary good cheer.

More information: The most scenic way to reach Santa Teresa is via the historic tram that connects it to city center. The tourists ride this rail for two reasons: The views are great and it is the safest way up the hill.