LISBON, Portugal --- Lisbon is not only one of Europe's cheapest and sunniest capitals; it's also one of the most beautiful, with a jumble of ancient neighborhoods that tumble down to the vast Tagus River (or, as the locals call it, the Tejo) as it rolls toward the Atlantic.
The most memorable Lisbon experiences can be absolutely free: strolling beneath freshly laundered linen strung over the alleyways of the old Moorish neighborhoods; June days when jacaranda trees splash the avenues with blue; the scent of cinnamon sprinkled over hot custard tarts; the ocean breeze on sultry summer evenings or fragments of fado tunes seeping from lace-veiled windows.
WHAT TO SEE: Tram 28. The best tour of Lisbon costs a mere $1.90 (1.40 euros). Hop on the No. 28 streetcar, settle into the leather seats and tour the city. The little yellow trams have rattled though Lisbon's historic heart for 90 years. Like a funfair ghost train, they swing round corners to reveal jawdropping views over river and rooftops, then dive back into a shady maze of medieval alleys. The No. 28 slips past Baroque churches and the fortified cathedral built when Christians and Muslims battled for control of what would become Portugal. In the Baixa and Chiado shopping districts, you may also spot mourners headed to the main cemetery, www.carris.pt.
Belem. This riverside neighborhood was the launch pad for Portugal's epic voyages of exploration to Africa, Asia and Brazil. The pristine Torre de Belem was built at the water's edge to welcome explorers home and is now the city's most famous symbol. The Jeronimos monastery was built in 1502 to commemorate Vasco da Gama's voyage to the East Indies; his tomb is there. The tower and the monastery cost $11 (8 euros) to visit but, like most museums, are free on Sundays up to 2 p.m., www.mosteirojeronimos.pt.
There are modern monuments, too. Built around a grassy waterfront plaza, the Centro Cultural de Belem arts center offers opera, jazz, ballet and a 20th century art museum, www.ccb.pt. The soaring Padrao dos Descobrimentos was built in the 1960s to celebrate the glories of the discoveries.
Coffee. Centuries of trade with Brazil and Africa have left Portugal with a taste for great coffee, and Lisbon is home to some of Europe's most charming old cafes. A Brasileira in the Chiado district opened in 1905 as a haunt for poets and artists. The Antiga Confeitaria de Belem is lined with 17th century ceramics, but is best known for its custard tarts -- pasteis de nata -- served here since the 1830s, www.pasteisdebelem.pt.
In Rossio square at the heart of downtown Lisbon, two venerable cafes face off across the plaza, the Nicola and the Suica. Round the corner in Praca de Figueira, the Confeitaria Nacional has been renowned for its pastries since 1829, www.confeitarianacional.com. Travelers on a shoestring should sip their bicas (espresso coffee) standing at the bar where prices are lower than sitting at the table.
Neighborhoods. Strolling the city's old districts is one of Lisbon's great pleasures. Start up at the Castelo Sao Jorge fortress overlooking the city, then lose yourself in Alfama, the oldest part of the city, a warren of narrow lanes and tiny squares, where the pastel painted facades are hung with laundry and the whiff of grilled sardines wafts up from curbside braziers. Admire the views from the Portas do Sol and Santa Luzia squares, then hit the shops in Baixa and Chiado districts rebuilt after the great earthquake of 1755 before finishing up for a long night among the bars and restaurants of the Bairro Alto, www.atl-turismolisboa.pt.
Museums. The Calouste Gulbenkian Museum houses one of Europe's greatest private art collections, amassed by an Armenian oil tycoon. In this eclectic mix of East and West you can marvel at masterpieces by Rembrandt, Renoir and Monet alongside Islamic, Chinese and Armenian artifacts, www.museu.gulbenkian.pt.
The Museu Nacional de Arte Antiga, better known as the "green windows museum," is a spectacular palace overlooking the river with great views from the garden cafe. It's filled with works by old European masters and a unique collection of Japanese screens and African ivory work dating back to the Age of Exploration, www.mnarteantiga-ipmuseus.pt.
For insights into Portuguese culture, check out the Museu Nacional do Azulejo, mnazulejo-ipmuseus.pt, which showcases traditional ceramics in a restored 16th century convent; the Museu Nacional dos Coches, with its collection of Cinderella-style royal carriages -- www.museudoscoches-ipmuseus.pt -- or the Fado Museum focusing on the haunting urban blues that form the essential soundtrack for a Lisbon trip, www.museudofado.egeac.pt.
Parque das Nacoes. The former industrial wasteland on the eastern edge of the city emerged from the 1998 World Fair as a riverside park filled with avant garde architecture housing theaters, exhibition halls, a vast shopping mall, restaurants, gardens, fountains and a fabulous aquarium -- the Oceanario -- www.oceanario.pt -- the best place in Europe to come eye to eye with sharks, rays and cuttlefish.
SLEEPING IN: Lisbon has a good range of budget hotels. You can find traditional pensoes with bare basics in great downtown locations such as the Pensao Praca da Figueira -- www.pensaopraca.com dafigueira.com -- from $34 (euro 25) for a double or the Residencial Alegria -- www.alegrianet.com/ -- from $58 (euro 43).
More upmarket choices include the BB Gold -- www.bbgold.com.pt -- in the heart of the Bairro Alto from $101 (euro 75); the 17th century Casa Sao Mamede -- www.casadesaomamede.com -- doubles from $135 (euro 100): or the Albergaria Senhora Senhora do Monte -- senhoramonte.blogspot.com -- from $115 (euro 85).
Recently, a new generation of hostels has opened offering modernized budget accommodation. Among the most highly rated are: Travellers House with bed and breakfast in a mixed dorm from $24 (euro 18) per person, travellershouse.com; Lisbon Lounge also from $24 (euro 8) per person, www.lisbonloungehostel.com; or the Oasis Backpackers' Mansion from $20 (euro 15) per person, www.oasislisboa.com.
DINING OUT: The Portuguese are among Europe's most avid restaurant goers because eating out can be almost as cheap as eating at home. There are hundreds of neighborhood tascas or taverns where you can dine on homecooked staples such as fava beans with sausage and coriander, or shredded salt cod mixed with eggs, olives and potatoes. Expect to pay around $6.50 (euro 5) a dish, or less if you ask for a "meia-dose," or half-portion.
Another good bet is Portugal's famous spit-roast chicken with hot piri-piri sauce -- try it at Bom Jardim, Travessa de Santo Antao, 11, known locally as rei dos frangos -- king of chickens.