Bhaskar Resto, Near Old Town, Yinuomulan street, off Dawa Road towards to Old town square (just off intersection of Dawa Road and the new 3 star Shangri-la Old Town Hotel), ☎ +86 15184990110 (bhaskaruday008@gmail.com). 7/7, 9AM-11PM. Himalayan cuisine. Bhaskar Retro serves some great Nepalise, Indian and Tibetan dishes. It is a new restaurant by chef Bhaskar after separating from Bhaskar's Kitchen. The food is fresh and authentic. The curry dishes and indian naan bread are exceptional. An extremely warm and friendly, english speaking Bhaskar, is a Nepali grown up in Darjeeling India. He is also happy to prepare some off the menu variations. The restaurant is extremely popular with foreigners, guides and monks visiting old town. Many vegetarian options in the menu. Not to miss the Indian Chai tea!  

Compass Cafe, (In the old town, just next to the old town square), [9]. Serves excellent authentic Western food (homemade spaghetti sauce!) and delicious cakes. Equiped with an Espresso machine. Cozy atmosphere, it has several heaters and is great for family. Free wireless available. Recently opened a bakery "In & Out" next door selling breads, muffins and other savouries. Moved to the new town after the fire 

Karma Cafe, (In the old town). Good food and hospitable staff. Owner Afang speaks perfect English. Not located in busy old town but off the beaten path. Tibetan house and meals, though western meals are also served. Rooms available, though only two rooms.

Hiker's Coffee (徒步者之家咖啡), Room 409, Building 8B, Huajun Square, Changzheng Road, Shangri-La, Diqing, Yunnan, China (Walk to Old Town for only 2 minutes), ☎ +86-13378876480 +86-0887-8228900, [10]. 6:30a.m. - 11:00p.m.. Established by an after 80s boy of Shanghai, Charles Tang. He loves hiking very much. You can take bus No. 1 or No. 3 to "Huajun Square". "Huajun Square" is just across from "Sto Express". If you raise your head, you can just see four Chinese words "华骏广场". Then follow the arrow on the map and find "Building 8B". After reaching the 4th floor, you will turn right in the hallway and get to "Hiker's Coffee" immediately. Business Scope: Western Food, Coffee, Drink, Shanghai Food. Shanghai Pan-fried Steamed Bun(生煎馒头) and Pork Dumping(小笼包子) are very good.(￥20 for big ones) ￥30.  

Hongxin Restaurant (红心餐厅; Hóngxīncāntīng), Heping Road (Across from the big Longfengxiang Hotel). Decent restaurant, serves some Tibetan dishes (baba, pipa meat).  

Korean Restaurant (also known as Yak Bar). Tasty Korean fare including seafood pancakes, sushi, zucchini rolls, table-top bbq, bibimbap. They rent bikes from the front of restaurant (20-30 RMB), and the boss even has a private stash of higher quality mountain bikes in storage for a slightly higher rental price. He will give you his cell number and come out to help you if you have any trouble with the bikes.  

Momos, (Enter the Old Town from the lower entrance 50m on the left). Serves Nomadic style momos (Tibetan Dumplings) and great Sichuan Food. Comfortable and friendly.  

The Olive (previously Noah Cafe and Inn) (挪亚). Best western food in town. Also Middle Eastern food. Free Wireless available. Their guest house is just across the street.100m west of the old town square. 

Puppet Restaurant, Old Town Street, ☎ +86 887 8225485, 13988782100. Great Tibetan food in a warm and friendly atmosphere, although there is only one page of the Tibetan food in their menu. They also serve Indian and Korean cuisine. Full of locals rather than tourists. If you have a sweet tooth, 奶渣炒面团 is worthwhile trying.

Qionglai Restaurant (邛崃餐厅), Wujin Road (Not far from Paradise Hotel). Great Sichuan dishes.  

Sean's Cafe No 2, North Gate Street, Old Town (40 metres from the car park, up a flight of stairs, look for the English sign).Opens 6:30AM. Authentic Tibetan food, great for breakfast. The Tibetan porridge and yak cheese dumplings are recommended. Daisy, daughter of the Tiger Leaping Gorge's Sean, speaks great English and can give good local travel advice. 

The Shangri-La Yak Cheese Shop, No. 3 Chi Lang Shuo, Old Town (Next to So Ya La and across from Fragrant Valley Coffee), ☎15987595185. 10am - 10pm. A specialty cheese shop that produces locally sourced yak cheese with Western methods. Great selection of local wines to pair with the cheese, as well as a wide selection of cheese-inspired local and Western dishes. 

Soyala Tibetan Diner & Bar, Cangfang St 1 (in old town, next to the white stupa). Burgers, patties and dumplings are made with free range 100% organic Yak meat and burger buns are prepared daily. The restaurant staff are former residents from the Children Charity Tendol Gyalzur in both Shangrila/Gyalthang and Duilong/Lhasa. The owner is a Swiss-born and educated ethnic Tibetan married to a local Tibetan. Good pizza, great Lentil soup, and tasty Shangrila brand beer (go unfiltered).

N's big burger kitchen, old town,5 meters to main squre, ☎ 0887-8233870. 8am-10pm. Bread served by french baker,no chinese sweet bread.good and cheap yunnan coffee,price start at 8 yuan.cheap but good quality western food and desert.whole day breakfast menu with various breakfast choice.may be the best yak burger in town.big and good tasty at a reasonable price.the restaurant also have a little coutyard with good sunshine design. 18rmb-60rmb.  

Somewhere Else Cafe (他乡咖啡厅), In old town (NE corner of the dancing square), ☎ +86-0887-8896789. open 8:30-22:00. Enjoy your coffee with a friend slouched in the comfy chairs in front of the fireplace while planning the next leg of your adventure. Foreign-owned. Free wifi. Advice available in English, Dutch, Tibetan, and Chinese. Serving steak, lamb, shoarmas, and much more.