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Is it the next Croatia? All signs point to "da."

Back in the 1960s and '70s, Montenegro was one of Yugoslavia's Adriatic hotspots, attracting vacationing movie stars and monarchs. After several other countries broke off from Yugoslavia in the 1990s, Montenegro formed a union with Serbia, its neighbor to the northeast. (They now share a president, but while Serbia still uses its old currency, the dinar, Montenegro has adopted the euro.) Getting there isn't easy--an overnight ferry from Bari, Italy; a one-hour flight from Rome on Montenegro Airlines; or a two-hour bus ride down from Dubrovnik, Croatia--but that just keeps it hovering right below the radar, at least for now.


Throughout previous centuries, coastal towns built thick stone walls around their perimeters as a defense against the Turks. (In the 15th century, the main town of Kotor gave its autonomy to Venice in exchange for protection.) Kotor's Byzantine-era fortifications from the 5th century are all walkable. Entrance to the fortress surrounding the town is free, but it's worth spending $1.25 to climb another wall that leads into the mountains, to the ghostly ruins of the Fortress of St. Ivan and a stunning view of Boka Kotorska, southern Europe's largest fjord. An older woman is usually stationed just outside of the city to collect a fee for the 90-minute trek.


Like their neighbors from other Adriatic countries, Montenegrins have learned how to make superior olive oil. Vendors at the market outside Kotor's Old Town sell half-liters for $4, along with sheep's-milk cheese and dried fruit.


The admission fee to the Byzantine-era citadel in the beach town of Budva--13 miles south of Kotor--also grants you access to the in-house maritime museum. The glass-encased models of Venetian ships and marine-themed paintings are nice, but the real appeal is the rooftop terrace, three flights up. Linger over a free cup of orange juice at the café, Citadela, and admire the views of long, sandy beaches and the dense Old Town, destroyed by a 1979 earthquake and painstakingly re-created. Trg Izmedju Crkava, 011-381/86-457-026.


Niksiko, a local lager, has a hoppy taste similar to Czech beers. The coolest place to drink it is Budva's Casper DJ Bar, an outdoor hangout in the center of Old Town. Half-liter bottles of the beer cost less than $2. Ulica Cara Dusana, 011-381/86-402-290.


The tiny island of Sveti Stefan (St. Stephen) was a fishing village until the 1960s, when the Yugoslav government booted the residents and converted it into an upscale hotel of the same name. Every ancient building on the island became part of the hotel. Non-guests pay $8 to wander around the world's most unusual medieval-island-cum-hotel. Over shots of loza (a robust grape brandy) at the no-name pub, you can almost envision the days when stars like Sophia Loren and Kirk Douglas were regulars. 011-381/86-420-000.


Shuttle buses take tourists from Budva to Sveti Stefan, a 25-minute ride, for $1.25. Look for the Olympia Express bus stop outside Budva's CKB Bank, near the Avala Hotel. For longer trips along the coast, Autoboka runs reliable, if rickety, buses that leave hourly from Kotor's bus station, a five-minute walk from Old Town. The trip from Kotor to Budva costs $2.50 each way. 011-381/82-322-101,


In Herceg Novi, north of Kotor on the Croatian-Montenegrin border, the Diving Center Marina leads half-day trips to World War I shipwrecks and limestone caves. They also run night dives, but in daylight you can better appreciate the ultraclear water. 011-381/88-332-171,


Fish such as dentex and gray mullet are found on most menus, and they're each consistently expensive. For just about $10, however, most restaurants offer succulent seafood risotto with grilled calamari, or mussels with buzara, a fresh sauce of garlic, onions, tomato, and mint. In Budva, go to Demijana (Slovenska Obala 3, 011-381/86-455-028); in Kotor, Bastion is a reliably good option (Stari Grad 517, 011-381/82-322-116).


Grannies in babushkas swarm the towns' main squares and bus stations hawking private rooms by the night. Alternately, many houses are marked by signs saying sobe ("rooms" in Serbian). Prices vary--Kotor being cheaper than Budva--but a room generally costs about $15 per person. Homes tend to be clean, spare, and frozen in the 1950s. If you'd prefer a hotel, the Hotel Vardar, just off the ominous-sounding Square of Weapons in Kotor, is the most comfortable affordable option (011-381/82-322-972, from $44). And in Budva, the Hotel Mogren has views of the Old Town and the ocean as well as surprisingly good breakfasts with made-to-order omelets (Mediteranska, 011-381/86-451-102, from $74).

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