Monchique, 6km to the north of Caldas de Monchique, and 300m higher up the range, is a hill town whose large market on the second Monday of each month (by the helipad) is famous for smoked hams and locally made furniture – especially the distinctive x-shaped wooden chairs. There’s also a weekly Sunday market on the main square, Largo 5 de Outubro, though the town is liveliest during the March Traditional Sausage Fair, when restaurants lay on special menus and there’s live jazz and folk round town.
The most impressive building in town is the Igreja Matriz (Mon–Sat 10am–5.30pm; free), up a steep cobbled street from Largo 5 de Outubro, but the rest of Monchique is worth a wander too – it’s dotted with beautifully crafted metal sculptures of local characters made by a contemporary Lisbon artist.
The most evocative local sight, though, is the ruined seventeenth-century monastery of Nossa Senhora do Desterro, which you can walk to up a wooded track – brown signs point you up here from Rua do Porto Fundo, the road leading uphill from the bus station. Only a rickety shell of this Franciscan foundation survives, apparently quite uncared for, but it’s in a great position overlooking the town and shows a beautiful blend of classical Renaissance facade with Moorish-influenced vaulting.