Otavalo is a town in the Andean highlands in the Imbabura province of northern Ecuador. It’s surrounded by volcanoes including the Imbabura Volcano. It's known for its Otavalo Market in the central Plaza de Ponchos, where traditionally clad indigenous townspeople sell colorful textiles and handicrafts. Nearby, the Tejidos El Obraje Museum has textile exhibits and weaving demonstrations.