Colonia del Sacramento (Nova Colonia do Santissimo Sacramento) was founded in 1680 by the Portuguese (Manuel Lobo), sandwiched in between the Portuguese colony of Brazil and the Spanish Vice Royalty of the River Plate (later Argentina, Uruguay and Southern Brazil). Its strategic position and use as a smuggling port meant that its sovereignty was hotly contested and the city changed hands several times between Spain and Portugal.
There are a number of boat connections that arrive and depart from Buenos Aires, Argentina throughout the day and these are managed by three companies - Buquebus, ColoniaExpress and Seacat.
Buquebus provides two services - one faster and more expensive and the other slower and therefore cheaper . The faster Buquebus  catamaran ferry (one hour) costs around 300 USD return and is usually quite crowded with day tourists and travel groups. All the fast boats have free wireless internet (WiFi, satellite link) and make sure you book in advance for weekends and the peak season (Christmas until the end of February). The slower boat costs 102 Pesos for a round trip from Buenos Aires and takes about 3 hours. (As of 12.03.2014 slow boat cost 540 Peso)
Colonia Express costs roughly 550-800 Argentinian Pesos p/p return and takes roughly one hour to reach Colonia. There is no wifi provided but there is a duty-free shop and a small bar selling snacks and coffees.
Seacat costs roughly 800 Argentinian Pesos p/p return and takes roughly one hour to reach Colonia.
A cheaper possibility is to take a boat from Tigre to Carmelo in Uruguay. From Carmelo, take a bus, which run every two to three hours from the center of the city to Colonia. Great landscape and also drops off kids from school along the way.
There are several connections by bus from Montevideo to Colonia, with most buses leaving from Montevideo's Tres Cruces terminal . The ride takes 2.5 to 3.5 hours depending on stops and costs about UYU270 pesos (Feb 2014). Be careful with people telling you that all buses are booked out. This is in general not true and a taxi is much more expensive. For the peace of your mind buy a bus ticket upfront to avoid rare disappointment.
Colonia is a good for visa runs for those people who wish to extend their stays in Argentina, and to pick up USD for exchange with Argentina's blue dollar.
The old city of Colonia, which holds the main attractions, is quite small. It can be easily walked in a single day. There are shops where you can rent bicycles, scooters or golf carts which you can use to ride around the city or in to the countryside. Streets aren't always in perfect condition, so keep an eye on the road, especially cobbled ones.
The ferry terminal is about half a kilometre south of the old city and the main bus terminal is about a kilometre south of the city center.
You can rent row and sail boats from the marina.
The main attraction of Colonia is its historic center. Eight small museums can be visited with only one cheap entrance ticket which must be purchased in the Museo Municipal (50 Argentinian Pesos). Seven of these museums are in the town center itself but it must be said that although not costly the museums have little to recommend themselves - most only consist of one or two rooms of very uninspiring exhibits.
For a few pesos you can go up to the top of the lighthouse (faro) for a view of most of the city and the river.
Outside of the city there is a semi-abandoned amusement park with Uruguay's only bullfighting ring, no longer in use.
- Basilica del Sanctísimo Sacramento. edit
There is a large tourist information center adjacent to the ferry terminal, and a small office at the western terminus of Calle Manuel Lobo.
- Climb up the old light house (entrance fee is 20 Uruguayan peso p/p)
- Walk the old city center and eat fresh ice cream
- Look for souvenirs and eat asado
The old city is full of restaurants which serve the weekend tourist crowd from Buenos Aires. The specialties are Italian and asado (barbeque).
Colonia was also settled by Swiss immigrants and is home to a unique local Swiss cheese that you can get at the markets.
- La Bodeguita, Del Comercio 167 (also accessable from the lower coast side), . A great place if you want something lighter than the common asados. Try to get a table at the lower patio with a view over the water. They have excellent sangria. Pizza 85. edit
Yerba mate, the local drink of choice. Every single person here carries around their own cup and bombilla, so when in Rome...
- Lentas Maravillas, Santa Rita 61. Barrio Histórico, ☎ 05220636 (firstname.lastname@example.org). 10:30-20:00. Amazing cafe and lounge with garden overlooking the Rio de la Plata. Brunch is especially good with Illy coffee. Stop by for 5 o'clock tea to enjoy tartlets, muffins, cookies, and other culinary delights or sip mojitos in the garden while reading a wide selection of books from the lounge. edit
- Colonia Rock, Misiones de los Tapes, 157, ☎ 2-8189. edit
- Moscato Cafe, Calle Real 166 (In the historic section of town). Very nice cafe with drinks and desserts. They also serve a full mate kit for 150 Uruguayan Pesos. It includes a bag of mate, a thermos full of hot water and the traditional mate cup. One of the only places in Colonia that serves traditional mate. edit
- Hostel Colonial, Av. General Flores 440, 052-28151 (email@example.com). Nice basic hostel, with Internet and shared kitchen. Dorms from USD 18.
- Hotel La Misión, M. del Tapes 171, ☎ ''+598'' 5226767, . checkin: 2pm; checkout: 11:30am. Small, cute hotel. Great location in historic district. The original building dates from 1762 USD 100. edit
- El Viajero Hostel, Washington Barbot 164, Phone +59852 22683, Email: firstname.lastname@example.org, . Dorms from USD 17 . Well-run, clean, friendly hostel just a few metres from the historic old city. WiFi, computers, kitchen, great common area. Live music on the weekends.
- Hotel Plaza Mayor, Calle Del Comercio 111. Barrio Histórico (in the center of the historic Colonia), (email@example.com), . Beautiful hotel with romantic courtyard in excellent location From USD 100. edit
- Sur Hostel address - Rivadavia 448, phone +598 45220553, Email: firstname.lastname@example.org, web page . Just a few blocks from the historical center. Wifi, free internet, hot water 24h, kitchen, great terrace and great barbecue.</sleep>
- Che Lagarto Colonia, 18 de Julio 487, ☎ +598 (4) 522-5752 (email@example.com), . A few blocks from the beach, close to major tourist spots, lies the Che Lagarto Hostel Colonia, the property has been declared historical heritage for its marvelous architecture. edit
Colonia is a preserved tourist town with very little of the harassment seen in most cities in Latin America. The dominance of local weekenders from Buenos Aires and Montevideo creates a very different environment from other tourist cities.
There are frequent buses to Montevideo and several time a day ferries to El Tigre in Argentina.