When we cross the Mekong to Ban Pak Ou, a settlement in the shadow of a sheer limestone cliff, we find the village temple's bell has been fashioned from the most profane of objects: the nose of an old American bomb. It's a reminder of Laos's 15 minutes of geopolitical fame. During the Vietnam conflict, the United States used CIA-sponsored planes and Hmong hill-tribe mercenaries to wage a secret war, dropping enough ordnance to earn Laos the dubious distinction of being one of the most heavily bombed nations in history. After the communist victory, thousands of citizens were confined to reeducation camps. By the late 1980s, however, even hermetic Laos admitted market reform and tourism development.

While the number of guesthouses, restaurants, and tour agencies in Luang Prabang has grown exponentially over the past decade, the town has clung to its laid-back aura and architectural vernacular thanks in large part to the preservation work of La Maison du Patrimoine, or Heritage House. "I went to Thailand in 1977. Chiang Mai was Luang Prabang—the same ambience. Do you know Chiang Mai now? It looks like a little Bangkok," said LMP chief technical adviser Emmanuel Pouille from his office in the old French customs house, built in 1922 and recently restored to its ocher-hued glory. "We've avoided the disaster of big hotels because the regulation is very strong."

One former royal residence has been renovated into a hotel with arguably the best kitchen in town, Villa Santi, an elegant, linens-and-china restaurant. Luang Prabang province has a distinctive slow-food cuisine featuring such local delicacies as jaew bawng, a thick paste of dried buffalo skin and fiery chiles, and khai paen, or stir-fried river moss tossed with sesame, that are best knocked back with shots of lao-lao rice whiskey. Before the tinkling sounds of a musician playing the ranyaat, a xylophone-like instrument, lull me to sleep, I head for the night market by the Phu Si. Compared with the touts-and-trinkets scene in Chiang Mai, the bazaar is tame: a few dozen stalls filled with saa paper lanterns, hand-loomed silk sashes, laughably fake coins (the French were not minting Indochine piasters in 1422), and piles of papayas, bananas, and mangosteens.

"You buy?" a merchant asks in a voice barely above a whisper. That's as insistent as the salesmanship gets. By 10 p.m. the commerce ceases and everyone drifts quietly home.