The country's wealthy once flocked to this sleepy colonial town on the bank of Lake Ypacarai (which means "Water please, Mister"). Today its restored summer mansions are home to middle-class families, and its charming cobblestoned streets are lined with pottery shops and art galleries that offer good quality handicrafts you won't find elsewhere. Every October, in celebration of the area's principal crop, Aregua hosts the Strawberry Festival.

Just as interesting as the town is the special train you take to get there: Built in England in 1861, the wood-burner is the world's oldest steam engine still in operation. Go with the understanding that reliability is not the line's chief asset: At press time, the train was running only on weekends. The train also stops in Luque, a colonial town founded in 1636 that has wonderful architecture and atmosphere. You'll see Guaranis making harps, guitars and gold jewelry. Allow at least a half-day for the trip. Aregua is 20 mi/30 km south of Asuncion.

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