From luxury properties to small bed and breakfasts, Oaxaca has some great choices of accommodations.
I have been twice to the well-known La Quinta Real, in the old Santa Catalina Convent, to eat as well as to meet friends. It is a very attractive but large property with lovely pool and a good restaurant. My friends loved the hotel and their large room.
I really enjoyed the bed and breakfasts that I have found in town. The first was Las Bugambilias. Located at Calle Reforma 402 everything is within walking distance. My room was the Bugambilias room which had a king bed and lovely patio. I thought the breakfast was excellent. The hotel is also home to the well-known La Olla Restaurant at the front of the property which was great for lunch.
I have also stayed at a sister property, Casa de los Milagros. The location at Matamoros 500 -c at Crespo, was not quite as good as Las Bugambilias, but was a short walk to the Zocalo. The rooms were very nice and the breakfast was really excellent. It is a small facility with only three rooms each with private bath. They have a third property, El Secreto, which looks great also. The family also owns a cooking school, Casa de los Sabores, which you might want to attend to learn how to prepare a local mole!
I also like Casa Oaxaca. The excellent restaurant is in the courtyard and open to the public. The hotel is in a beautifully renovated home. García Vigil 407, Centro Oaxaca
Le Casa de Mis Recuerdos is another good property. It is located at Pino Suarez #508.