How do you transform an all but exhausted industrial city? The Spanish steel capital of Bilbao pulled it off with one splendid piece of architecture: Frank Gehry's iconic Guggenheim. Turin, Italy, home of deflated automobile giant Fiat, has tried a more diverse approach. The Winter Olympics were, of course, one part of the plan. They left their mark all over the city—the two most celebrated examples are Japanese architect Arata Isozaki's Palasport arena and Gae Aulenti's remodeling of the audacious Palavela, designed by Franco Levi in the sixties. And other architects are now joining up to revamp Turin's desolate factoryscapes. But this northwestern Italian metropolis has, in fact, been planning a comeback for years. The massive program of civic enhancement includes more than just buildings (and a new subway line); Turin is also in the middle of a contemporary art explosion.

In no other Italian metropolis—Milan included—have the affluent art collectors been so consistently receptive to the modern. (One of the country's most influential galleristi, Gian Enzo Sperone, started out here in 1962 before opening galleries in Rome and New York.) The city's newest megapatron, Patrizia Sandretto Re Rebaudengo, debuted her new Fondazione Sandretto Re Rebaudengo museum in 2002 in an all-white structure by minimalist of the moment Claudio Silvestrin. It serves as one of the three main sites for the city's new international art fair, Triennale Tremusei (the next festival will be in 2008), which aims to upstage older artfests such as the Venice Biennale by focusing exclusively on young artists—the future Hirsts and Cattelans—before they go exponential. Cocurator Francesco Bonami, who is also the artistic director of the Fondazione, says Turin is committed to new art because it has traditionally been "less tied to an image of the past, or a particular lifestyle, than other Italian cities like Rome, Florence, and Milan." In-deed there has been a serious museum boom, bringing such new showcases as the Palazzo Bricherasio, the Museum of Contemporary Applied Arts, and the Parco d'Arte Vivente.

The Triennale's other main venues are the Galleria Civica d'Arte Moderna e Contemporanea (GAM) and the Castello di Rivoli. An unfinished Savoy palace destroyed by French troops in 1693 and never fully rebuilt, Rivoli looks almost as bizarre as some of the works it displays. All blind arches and truncated buttresses—like something from a Piranesi etching—the building is a fitting place for a permanent collection that contains works such as Maurizio Cattelan's notorious Novecento: a horse dangling forlornly on a rope from the ceiling of a room decorated with Baroque stucco.

Turin's most important art fair is still Artissima, which takes place every November in the Lingotto, the former home of the Fiat plant. Last year's exhibition caused a nationwide scandal with a satirical painting by the Sicilian art cooperative Laboratorio Saccardi. It depicted Fiat heir Lapo Elkann being hit by a meteorite in a room littered with the evidence of drug abuse. It was a reference to a night of excess just weeks prior that had landed the young executive in the hospital. Friends of Elkann's bought the painting and destroyed it.

The Lingotto itself is a symbol of citywide renewal, its 60-odd acres of abandoned industrial space steadily being repurposed. When the Fiat factory opened for business in 1923, the production line was originally designed to go upward through the five stories. The finished cars were then sent down a spiral ramp that is still one of the architectural glories of Turin. At the top, Giovanni Agnelli, grandfather of the late Gianni, built a rooftop racetrack to test some of the cars coming off the line. Today the racetrack is still there, but it now curves around two interventi by Renzo Piano. One is a squashed glass bubble used for conferences and exhibits. The other, an elongated, canopied glass shoe box, is home to the Pinacoteca Giovanni and Marella Agnelli art collection. (There are some marvelous pieces here—Canalettos, Matisses, and a delicious Modigliani—but the whole group seems to reflect spending power more than discernment.) Piano also designed a 2,200-seat auditorium inside the Lingotto complex, as well as two hotels: the luxe glass-and-steel Le Meridien Art & Tech and its plainer cousin, Le Meridien Lingotto.

The Lingotto's transformation has not been without hiccups—the 8 Gallery, a U.S.-style mall inaugurated in 2002, took years to fill up, and the Pathé multiplex has failed to lure many Turinese from the theaters downtown. But the Olympics made up for any setbacks. The Lingotto became the broadcasting hub of the event, and now the Olympic Village is being turned into high-end housing. Gentrification may not always be a good thing, but for Lingotto's gray workers' dormitories, the only way is up.

A reprieve has also come for the Mole Antonelliana, that great domed Turin landmark, which until recently remained as useless as it was impressive (unless you count artist Mario Merz's Il Volo dei Numeri, a series of glowing red numbers trailing up the dome). This soaring white elephant—commissioned as the city's synagogue in the 19th century but never used as such—has finally found its calling as the home of the National Cinema Museum. Go if for no other reason than to ride the glass elevator to the observation deck 280 feet up. The views of the surrounding Alps are magnificent, especially on those rare days when the spire emerges like a submarine turret from a sea of low-lying clouds.

When Turin's notorious fog does finally lift, the Piazza Vittorio Veneto comes alive. Turin is the capital of the Italian aperitivo cult, and come eight o'clock the stylish folks at bars such as La Drogheria begin spilling out under the arcades of the main square. The same crowd is at the slick new restaurants that have swooped in alongside old stalwarts like Del Cambio. At Cantina Babette, Turinese chef Ivan Accorsi does a compelling northern Italian fusion act, complementing a 6,000-bottle wine cellar. And at La Pista, on the roof of the old Fiat factory, chef Massimo Guzzone's foie gras four ways is a suitable accompaniment to the extraordinary setting. Gruff taxi drivers generally break into a smile when they hear the words "La Pista." It's the only chance they get to drive up that famous ramp. For one brief moment, they can pretend they're Gianni Agnelli—or at least his chauffeur.

Insider Tips

Until recently Turin was only a business hub, with a staid group of hotels to choose from. These days there are smart alternatives: Town House 70 ($255–$630; 70 Via XX Settembre; 39-011/1970-0003; townhouse.it) is the suave Turinese outpost of a successful Milanese mini-empire. Its 48 big rooms and cool lounge trump the traditional Principi di Piemonte. If only ultraluxe will do, it has to be the brand-new Golden Palace ($500–$4,400; 18 Via dell'Arcivescovado; 39-011/ 551-2111; thi.it). The 195-room behemoth is no looker on the outside—it used to be an insurance office—but inside it's sumptuously thirties moderne.

In Turin even the Christmas lights are works of art. The Luci d'Artista is a yearly series of Christmas-light installations by artists such as Daniel Buren, Jenny Holzer, and Rebecca Horn.

Address Book

Le Meridien Art & Tech From $215 to $515. 230 Via Nizza; 39-011/664-2000

Le Meridien Lingotto From $170 to $340. 262 Via Nizza; 39-011/664-2000; lemeridien.com

Cantina Babette Dinner, $100. 16 Via Alfieri; 39-011/ 547-882

Del Cambio Dinner, $255. 2 Piazza Carignano; 39-011/546-690

La Pista Dinner, $180. 294 Via Nizza; 39-011/631-3523

La Drogheria 18 Piazza Vittorio Veneto; 39-011/812-2414

Castello di Rivoli Piazza Mafalda di Savoia; 39-011/ 956-5222; castellodirivoli.org

Fondazione Sandretto Re Rebaudengo 16 Via Modane; 39-011/379-7600; fondsrr.org

GAM 31 Via Magenta; 39-011/442-9518; gamtorino.it

Museum of Contemporary Applied Arts 5 Via Maria Vittoria; 39-011/070-2350

National Cinema Museum 20 Montebello; 39-011/813- 8511; museocinema.it

Palazzo Bricherasio 20 Via Lagrange; 39-011/571-1811; palazzobricherasio.it

Parco d'Arte Vivente 121 Corso Casale; 39-011/819- 1253; parcoartevivente.it

Pinacoteca Giovanni and Marella Agnelli 230 Via Nizza; 39-011/006-2008; pinacoteca-agnelli.it

Artissima 280 Via Nizza; 39-011/546-284; artissima.it