Lisbon's Seven Hills: Trams, Tiles, and the World's Best Pastéis de Nata

Lisbon is the oldest capital city in Western Europe — older than Rome, London, or Paris — and the city that emerged from the catastrophic earthquake of 1755 (which destroyed 85% of the buildings and killed 30,000 people) is a remarkable achievement of 18th-century urban planning. The Pombaline downtown, rebuilt in a grid of elegant baroque buildings with earthquake-resistant timber frames, is one of the finest examples of planned urban design in Europe.

The Alfama, the old Moorish quarter that survived the earthquake on its rocky hillside, is Lisbon at its most atmospheric — a labyrinth of steep alleys, whitewashed houses with terracotta rooftops, and miradouros where the city spreads below and the Tagus glitters in the distance. The Castelo de São Jorge, the Moorish castle that crowns the hill, offers the finest panoramic view of Lisbon, and the Fado houses in the streets below it are the best places to hear the melancholy music that is Lisbon's most distinctive cultural export.

The Tram 28, which climbs through the Alfama and the Graça neighbourhood on its way to the Campo Ourique, is one of the most famous tram rides in the world — a yellow wooden tram that squeezes through streets so narrow that passengers can touch the walls from their seats. It is genuinely useful as transport and genuinely beautiful as an experience, though the queues in summer can be long enough to make walking the better option.

The azulejos — the blue-and-white ceramic tiles that cover the facades of Lisbon's buildings — are one of the city's most distinctive features, and the National Tile Museum (Museu Nacional do Azulejo) in the Xabregas neighbourhood is the finest place to understand their history and variety. The museum is housed in a former convent with a baroque chapel entirely covered in tiles, and the collection spans five centuries of Portuguese tile-making.

The pastéis de nata — the custard tarts that are Portugal's most famous food export — were invented by the monks of the Jerónimos Monastery in Belém in the 18th century, and the Pastéis de Belém bakery, which has been making them to the original recipe since 1837, is the finest place to eat them. The combination of the flaky pastry, the creamy custard, and the dusting of cinnamon and icing sugar is one of the great simple pleasures of European food.

Belém, the riverside neighbourhood west of the city centre, contains the finest concentration of Manueline architecture in Lisbon — the Jerónimos Monastery and the Tower of Belém, both UNESCO World Heritage Sites, built to celebrate the Age of Discovery and the wealth it brought to Portugal. The Monument to the Discoveries, a 1960 sculpture of Vasco da Gama and 32 other figures of the Age of Exploration, stands at the point from which the Portuguese fleets departed.

The best time to visit Lisbon is in spring (April to June) or autumn (September to October), when the weather is warm, the light is extraordinary, and the city has not yet reached the saturation of July and August. The city is at its most alive in the evenings — dinner does not begin until 8pm, and the bars and restaurants of the Bairro Alto and the Cais do Sodré stay open until the early hours. The June festivals of Santo António, when the city celebrates its patron saint with sardines, music, and dancing in the streets, are the finest time of year to be in Lisbon.

The Fado houses of the Alfama and the Mouraria are the finest places to hear Portugal's most distinctive music — a genre of melancholy songs about longing, loss, and the sea that has been recognised by UNESCO as an Intangible Cultural Heritage. The best Fado houses (casas de fado) serve dinner alongside the music, and the combination of grilled fish, Alentejo wine, and the voice of a fadista singing about saudade (the untranslatable Portuguese feeling of nostalgic longing) is one of the most atmospheric evenings in Europe.

The LX Factory, a complex of 19th-century industrial buildings in the Alcântara neighbourhood that has been converted into a market, restaurant, and creative space, is the finest example of Lisbon's recent urban regeneration. The Sunday market, which fills the factory's streets with food stalls, vintage clothing, books, and handmade goods, is the best in Lisbon and draws a crowd that is entirely local rather than tourist. The Time Out Market, in the Cais do Sodré, is the more famous food hall but the LX Factory is the more authentic experience.

Getting around Lisbon: the city's hills make it one of the more physically demanding European capitals to explore on foot, and the combination of the trams, the funiculars (elevadores), and the metro makes it easy to avoid the steepest climbs. The Lisboa Card, which covers unlimited public transport and free entry to most museums, is good value for a two or three-day visit. The ferry across the Tagus to Cacilhas, which takes 10 minutes and costs less than a euro, offers the finest view of Lisbon's waterfront and is one of the best-value experiences in the city.

The Sintra day trip from Lisbon is one of the finest in Europe — a UNESCO World Heritage Site of romantic palaces, Moorish castles, and forested hills 30 kilometres west of the city. The Pena Palace, a 19th-century confection of turrets, battlements, and vivid colours perched on a rocky crag above the town, is the most extraordinary building in Portugal, and the Quinta da Regaleira, with its initiation well (a spiral staircase descending 27 metres into the earth) and its network of tunnels and grottoes, is the most mysterious. The train from Rossio station takes 40 minutes.