THE COOLEST SMALL TOWNS IN THE U.S.A.

Homer, Alaska

Pop. 5,250

Five hours south of Anchorage on the Kenai Peninsula, Homer could easily double as the fictional town of Cicely from the old TV show Northern Exposure. The Kenai Mountains loom behind every building, and the whole town stops by the farmer's market on summer weekends and Wednesdays to pick up berry jam and organic greens. "There's such a wow factor to the way Homer looks," says Carri Thurman, co-owner of Two Sisters Bakery and B&B; she moved to Homer from Idaho 20 years ago. "I've traveled to a lot of places, but I've never been anywhere that's given me quite the same palpitation in my heart." Locals gather for coffee and warm sticky buns on Two Sisters' back patio, which overlooks the Kachemak Bay and the rocky coastline (233 E. Bunnell Ave., 907/235-2280, twosistersbakery.net, rooms from $100).

"This place is mostly fishermen, writers, and artists," says Andrew Wills, a longtime resident and fisherman. And bookstore owners: Wills also runs the Old Inlet Bookshop, which stocks a large collection of books about Alaska and occupies a log cabin (3487 Main St., 907/235-7984).

A new generation is settling in town. Will Schlein ditched his job managing a Maryland candle factory after a four-day vacation to Homer in 2002. That was all it took, he explains, "to feel the special energy of the people and the earth." Homer, it bears pointing out, is known as the Cosmic Hamlet By Sea. "People here have such a diversity of outlook," says Schlein, who now owns the Homer Hostel (304 W. Pioneer Ave., 907/235-1463, homerhostel.com, private room from $50). "Everybody travels all the time, so the town doesn't ever feel closed in."

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