With houses built on the side of a hill, an attractive bay and a mountainous backdrop, Funchal has one of Portugal’s most beautiful settings. The coastal city is the capital of the island of Madeira and combines a modern beach resort with hundreds of years of history. Surf, tour ancient buildings and sail the ocean to see whales and dolphins.

The town is named for the bright yellow fennel (funcho in Portuguese) that grew here when the Portuguese settled the area in the early 15th century.

Funchal’s natural beauty isn’t confined to the coast and surrounding mountains. Spend a few hours in the sunken, rose and French gardens of Jardins de Palheiro. Stroll through Jardim Orquidea’s miniature jungle filled with varied orchid species. Enjoy thousands of blooms at the Madeira Botanical Gardens.

Explore the historic buildings of the old town area. Admire the stained-glass windows, baroque altars and gothic arches of the 16th-century Sé Cathedral. Amble along cobblestone streets lined by old buildings, some dating back to the 15th and 16th centuries. Visit the Museo Municipal for its natural history exhibits. Gaze at the collection of Turkish and North African decorative tiles at the Frederico de Freitas Museum.

Ride the cable car up to Monte, a small village 1,804 feet (550 meters) above sea level. When you want to come back down to Funchal, ride a toboggan. These resemble large wicker baskets and are pushed down the steep roads by drivers.

Walk along the promenade from the city center to the Praia Formosa, a collection of beaches. Venture farther out to sea on a dolphin- and whale-watching trip or take a boat cruise along the coast.

As Madeira’s capital city, Funchal has good transportation links. Madeira Airport is 13 miles (21 kilometers) away. With Funchal’s mild subtropical climate, its beaches, gardens and historic sites can be enjoyed year-round.