Some of the finest regional cooking in Mexico is found in Oaxaca. The area is known for its seven moles. These are complex sauces combining chiles with other ingredients from almonds, tamarind and chocolate to toasted seeds and other spices. There are yellow moles, red moles and black moles also.
As far as restaurants go, I have always loved the Casa de la Abuela on the second floor at the Zocalo’s Northwest Corner. You’ll find moles and other regional dishes with great views of the Zocalo below. Av. Miguel Hidalgo 616. Casa Oaxaca is one of the best in town with its Nuevo Mexicano cuisine served on its wonderful central patio. I also love Casa Oaxaca’s El Restaurante at Constitucion 104 – 4 (Enter Reforma and 5 De Mayo).
I also like La Olla at Las Bugambilias which is always good and in a quiet neighborhood.
Casa Crespo is an excellent restaurant and cooking school. Allende 107. Other restaurants with great buzz are Restaurante Catedral, La Biznaga, Cafe Brujula for great coffee and pastries, Pitiona and La Teca, featuring the cuisine of the Isthmus of Tehuantepec. Chocolate Mayordomo is a great place to stop in for chocolate or buy mole sauces to take home. They have several locations in Oaxaca. Two friends in San Miguel de Allende just recommended Los Danzantes for great food.
I just read about Origen, a new restaurant in Oaxaca. It is getting great reviews. I can’t wait to try it on my next trip.