Old San Juan is small and exquisitely formed. And now, restored to its original glory, it makes a perfect getaway. Amy Engeler celebrates a storied island outpost

Getting down to Old San Juan isn't exactly like flying to Havana in the 1950s to step out for the night, but almost. The trip is easy and the change intense. Three and a half hours after my plane leaves New York City, my taxi is speeding along the Puerto Rican shore, where the Atlantic foams and the palm fronds are aflutter. The curving walls of Fort San Cristóbal, one of Old San Juan's landmark fortresses from buccaneer days, cast a shadow like an overgrown sand castle. Music blares from everywhere, as does the sound of buzz saws. The skateboarders clickety-clack along Calle Norzagaray. On occasion, a whiff of cigar smoke comes in through the car's open windows.

At the western end of a two-and-a-half-mile limestone islet, separated from the sprawl of the modern city, Old San Juan is in the midst of a resurgence. The tiny area has had cameo appearances in a handful of recent American movies and is full of new restaurants and museums—not yet in the guidebooks—as well as new cruise ship berths. This is my second visit, after twenty years. As I drop my bags at the Gallery Inn and head down a steep hill toward the deep-blue water of San Juan Bay, I wonder if it is the same place at all.

I certainly don't remember the energy. Rushing down Calle San Francisco to meet Leopoldo, a native San Juanero and the supervisor of the municipal tourism office, I squeeze myself against an orange facade to avoid a truck's side-view mirror protruding over the sidewalk as it passes, a peril of these narrow sixteenth-century streets. Pigeons scatter as we cross the Plaza de Armas. Schoolchildren on a class trip play around the spraying fountain. Leopoldo promised to show me his favorite places in Old San Juan during his lunch hour, a quick introduction. But instead of visiting any of the historic buildings or fortresses that make up this UNESCO World Heritage Site, including the magnificent walls surrounding the city, he leads me unapologetically into the Art Deco lobby of a Banco Popular. Then he introduces me to a retired soap opera actress and to the director of a new pop culture museum, with whom we stand in a bright interior courtyard near the governor's mansion, talking about the late salsa pioneer Héctor Lavoe.

With Leopoldo's lunch hour frittering away, we've moved hardly more than a couple of blocks. His point, so I gather, is that the wealth of history here in the second-oldest European settlement in the New World (only Santo Domingo in the Dominican Republic is older) can be absorbed, without effort, by hanging around. The atmosphere fuels him and his friends. "Old San Juan is like the Bible," one of them explains. "You look and keep finding more. Many mysteries are buried beneath us."

As one of the most vibrant artistic communities in the Caribbean, perhaps in all of Latin America, Old San Juan is a surprisingly orderly and refined place. Residents keep late hours and European eating habits; they dress in shoes, not sandals, and never in shorts (those are for tourists). They debate politics (mostly on the far left) with humor and throw themselves into their creative passions. A hotel receptionist sings in a salsa band, a guide moonlights as a flamenco dancer, a waitress spends her mornings making jewelry in a workroom overlooking the ocean. A young artist opens his ground-floor studio doors, nodding at passersby as he constructs a Christmas tree out of plastic army figures.