The Otavalo Market, which makes this market town famous, is undoubtedly one of the most important and spectacular markets in all of Latin America. The Otavalo market is attractive to visitors for both its outstanding shopping and its cultural significance. Local people use market day much the way their ancestors did during Ecuador’s pre-Colombian history. The Otavalo market is a fascinating way to experience traditional Ecuadorian culture and the traditions of the Andes.

It is a 3 km (2 mi) wide caldera and crater lake at the foot of Cotacachi Volcano in the Cordillera Occidental of the Ecuadorian Andes. Its name comes from the Kichwa indigenous language and means "Lago del Cuy" or Guinea Pig Laguna in English. It was given this name due to the guinea pig shape of the largest Island in the middle of the laguna. These animals play a significant part in the everyday life of Ecuadorians

Located in Peguche community, just 5 minutes northwest of the town of Otavalo. Peguche Waterfall is a beautiful waterfall of 18 m in height, formed by the river of the same name, which starts at Lake San Pablo. The waterfall is one of the most important tourist attractions of Otavalo. Because of its proximity and easy access, several tourists and visitors come to the sector to meet and enjoy a unique landscape.