The Old Town of Lijiang (丽江古城 – li jiang gu cheng) is the larger and more developed of two old towns that can be found in the city. As much as the name and architecture would like you to think that the buildings have been around for thousands of years, the reality is much of the old town has been developed and expanded over the past few decades.
One of the best things about the Lijiang Old Town is the street food. You'll find a huge variety of different Chinese dishes, though ironically it's a little hard to find traditional Yunnan cuisine compared to other regional Chinese cooking styles. However, fear not. If you are really craving some indigenous Yunnan dishes, there are enough Naxi restaurants sprinkled throughout the labyrinth of narrow corridors. Some of the local specialties are focused around Yak meats, cheeses and teas which you should be sure to try. You can get lost in the crowded cobblestone streets for hours while passing a variety of small vendors, cafes, restaurants and bars.
Also, with countless guesthouses, it is a great place to stay during your visit. However, be aware that the main square can be loud and crowded until after midnight. This can be painful if you have to wake up to catch the early bus to Tiger Leaping Gorge or Lugu Lake. That said, try to find a place on the newly developed eastern end of the Old Town if possible. Just be sure to take a card of the guesthouse (preferably with a map on it) so you can get some help finding your way back.