Of all the 18th-century beach towns dotting the shore between Rio de Janeiro and São Paulo—Ubatuba, São Sebastião, Santos, São Vicente—only one has survived the ravages of urbanization intact: Paraty. Until the sixties, this Portuguese fishing village was a forgotten outpost, backed by the forested hills of the Serra do Mar and facing a bay of hundreds of uninhabited islands. Then the Brazilian royal family arrived, bought land, and helped create strict preservation laws. Those who have houses here—and those who come to visit—are a discreet and knowing bunch who prefer the town's small terracotta-roofed villas and converted fishermen's cottages to the grander homes in, say, Angra dos Reis. Nor do they come to beach it; the coastline here is rather rocky. Those who come are chefs, filmmakers, literary figures—from Europe and the Americas—all in tune with the sentiment of Paraty's most prominent resident, Prince João de Orleans e Bragança. "When the famous come to Paraty, no one notices them or cares who they are," says the prince, a descendant of Brazil's last emperor, Dom Pedro II. "Which is great for two reasons—because this is how life should be and because it means that the nouveaux riches don't come here."
Pipo Muscará arrived in Paraty in 1992. He runs the best place in town for seafood, O Punto Divino, where he serves only what he catches in his own nets. "I came on a whim and fell in love with the way of life," he says. "So I left my house in Italy and moved here. My family thought I was crazy." A few doors down, at the steak house Bartolomeu, owner Deborah Manfroi tells a similar story. After a career as a model with Elite, she says, she got "sick of the glitz." So she moved to Rio to study with celebrated chef José Hugo Celidônio, then found her place on the beach in Paraty. Likewise, Cacá Freider, an ex–line producer on such films as At Play in the Fields of the Lord, opened Catimbau nine years ago. It's a bar and grill floating out in the middle of the bay—indeed like something in a movie. Just across the water lives Liz Calder, cofounder of the Bloomsbury publishing house, who brings writers like Paul Auster, Salman Rushdie, and Michael Ondatjee to the town's annual literary festival.
The foodies come here, too. Yara Castro Roberts, who grew up in Belo Horizonte and spent many years in the States, has made it her mission to introduce travelers to the local bounty. Through her Academy of Cooking and Other Pleasures, she conducts food tours of the area and holds one-night cooking classes in her tiny house in the village. Roberts's husband, Richard, helps entertain the small group gathered around the kitchen table to watch—and taste—as Yara prepares fantastic Bahian and Amazonian stews, breads, and fish.
But the most famous kitchen in these parts is tucked into the hills 20 minutes away. Olivier and Valeria de Corta's Gite d'Indaiatiba sits in a lush hollow looking out over the ocean and serves impeccable Euro-Brazilian dishes (think chestnut-and-Roquefort quiche and chile-pepper shrimp with tropical fruit risotto).
In our opinion, the only way to experience Paraty is to rent a house through an agency. The Brazilian Beach House Company, for example, has Casarão Amarelo ($750 a night), a pastel stucco hideaway a few minutes from town. It's a simple affair with just the perfect touch here and there—a terracotta bowl of lemons on a rough farmhouse table—and a small but lovely pool. Angatu is another company with a number of top listings; owner João Paulo Furtado knows everyone, particularly the people with beautiful houses. Among the most special is the waterfront home belonging to Prince João de Orleans e Bragança ($2,000 per night). The 18th-century stone mansion bears a touch of grandeur and aristocratic taste—but done on the most modest scale. Everywhere are family portraits and silver, wonderful old furniture and bibelots, along with history and charm galore. Prince João's former country estate, now called Casarão da Serra, is also available to rent ($6,000 a night). It's a six-bedroom manor filled with colonial pieces from the province of Minas Gerais and surrounded by its own forest, lakes, waterfalls, and orchid garden.
The chicest island in the bay is Ilha do Araújo, and the loveliest house there is the Casarão do Araújo ($6,000 a night). This six-bedroom home of a Brazilian TV star has a pool, a private boardwalk, and spectacular views of the bay. Next door is Villas do Araújo, three luxe bungalows right on the beach ($2,500 a night). Both options have access to an 80-foot sailing ship or a 55-foot motor cruiser with chef, captain, crew, and guide.
Angatu 55-11/3872-0945; angatu.com
The Brazilian Beach House Company 54-11/5093-1724; brazilianbeachhouse.com
Le Gite d'Indaiatiba Dinner, $60. 55-24/3371-7174; legitedindaiatiba.com.br
Bartolomeu $ Dinner, $55. 176 Rua Samuel Costa; 55-24/3371-5032
Catimbau Dinner $60. Ilha do Catimbau; 55-24/3371-1847
O Punto Divino Dinner, $40. Praça da Matriz; 55-24/3371-1348
Academy of Cooking and Other Pleasures Course and dinner, $70; five-day tour, $2,400. 55-11/3872-0945
$ Establishment accepts no charge/credit cards or accepts cards other than the American Express Card.