Positioned at the tip of Florida's strand of keys, Key West fancies itself capital of the Conch Republic (natives of the island call themselves Conches) and mecca of our very own Caribbean islands. As escapes go, it fits the bill with all the swashbuckling history and lure of Indians, pirates, business tycoons, artists, writers and vacationers in search of tropical ambience closer to home.

At one time, Key West (population: about 25,000) was the wealthiest city per capita in the United States. The reason? Bountiful Spanish galleons shipwrecked on the surrounding coral reef deposited their stash on the ocean floor, rewarding centuries of salvagers with gilded tokens. Twentieth century treasure hunter Mel Fisher is current record holder in these treacherous waters, hauling in about $400 million in gold and silver that went down with the Nuestra Senora de Atocha, a 17th century Spanish galleon that sank 45 miles off Key West.

You can inspect the booty it took Mr. Fisher 16 years to find, and view a video on his winning technique, at the Mel Fisher Maritime Heritage Society Museum located downtown. More salvaged spoils are on display at Key West's newest nautical museum, the Historic Key West Shipwreck Museum. A glimpse inside reveals a time capsule of everyday life in the mid-1800s.

Key West's southern exposure sparkles with a lot more than gold. The island's many unusual cottages and gingerbread mansions were constructed during the 19th century by ships' carpenters and reflect the architecture of their home ports in New England and the Bahamas, with a melange of Spanish, New Orleans, American Gothic and Victorian motifs. Historic Curry Mansion is a popular stop for a closer look at a decorative side of Key West most visitors don't expect to find.

Meandering streets lined with blazing bougainvillea and intriguing shops make biking and just wandering around a delightful experience. The best way to see Key West for the first or 15th time is aboard either the Conch Tour Train or the Old Town Trolley. You can board them at separate stations in the heart of town or pick up the trolley in front of many hotels and other specified stops on the island.

Ernest Hemingway put pen to paper in Key West, and Hemingway House, his home for more than 20 years, has spacious grounds and free-roaming cats. If you are on the island in July, it's easy to get caught up in the Hemingway Days Festival, the city's annual salute to one of its favorite sons.

The only American lighthouse located in the center of a city is across the street. The Key West Lighthouse recently was restored to turn-of-the-century condition and reopened in time for the August 1989 bicentennial observance of the American Lighthouse Service. The 140-year-old structure, operated as a museum the last 16 years, will enjoy further attention when renovation is completed on the adjacent keeper's quarters, which houses exhibits depicting the history of the lighthouse.

Nearby, Audubon House is another small museum jewel. John James Audubon stayed there while painting wildlife of the Florida Keys, and among the antique treasures on view is one of the artist's few intact Double Elephant Folios.

Surrounded by the Atlantic Ocean and the Gulf of Mexico, Key West is closer to Havana, Cuba, than to Miami. In the mid-1800s, the art of cigar making came the 90-mile distance from Cuba to Key West and sparked a thriving industry before moving on to Tampa. Tucked along pedestrian alleyways, several small mom-and-pop operations still hand-roll cigars today, and the curious can come in for a closer look at how it's done. Naturally, you can purchase the aromatic smokes and have them shipped to friends.

The work of noted local artist Mario Sanchez gives special meaning to the cigar trade, with colorful scenes that depict his early childhood as a "roller" in a cigar factory. There his father worked as a "reader," reviewing Spanish-language newspapers and novels for laborers as they rolled the leaves.

Key West's Duval Street cuts an enticing swath across the island from Atlantic to Gulf and serves up the best collection of gift shops, snazzy boutiques and a not-to-be-missed department store called Fast Buck Freddy's. No trip down Duval is complete without a stop at Sloppy Joe's, Hemingway's old watering hole, or at Jimmy Buffett's Margaritaville Cafe. Side streets offer even more exploration.

Duval Street really comes alive on the city's many festival days with street vendors and pushcart munchies like conch fritters and mouth-size bites of Key lime pie. Come October, it's the main haunt for Fantasy Fest, Key West's answer to an all-out Halloween bash complete with Grand Parade and outlandish get-ups.

Duval dead-ends at the Gulf of Mexico, and it is there that the visitor can see spectacular Key West sunsets. But the place to applaud this event is a half-block away and a world apart at Mallory Square Pier. Come sundown, festive spectators and a curious assortment of performers gravitate there to celebrate evening's ritual.

From luxurious waterfront resorts to whimsical bed-and-breakfast inns and national chain lodgings, guest accommodations have island rooms for every pocketbook.

Nestled mid-Duval Street, Holiday Inn La Concha recently was renovated and features a Hemingway Suite, a lively disco at street level and, rooftop, the best view of the city. Perched at the foot of Duval Street, the Pier House has expanded with its new bTC Caribbean Spa; 21 deluxe rooms, a European-style beauty treatment center and health spa, plus conference space.

Ocean Key House is across the street at Zero Duval Street, and the new Hyatt Key West is nearby on Front Street. By 1992, the Ritz-Carlton Key West will open its doors, with part of the property built on the mainland at Truman Annex and the 285 guest rooms constructed a short ferry ride away on Sunset Island, a tiny wisp of land 500 yards offshore from Mallory Square.

A premier Key West address is the historic Marriott's Casa Marina Resort, the dream of railroad and hotel tycoon Henry M. Flagler. When Flagler extended the last stretch of his Florida Eastcoast Railroad -- "the railroad that went to sea" -- from Miami to Key West in 1912, he designed the Casa Marina to house his wealthy Newport, R.I., clientele. He died before the hotel was completed. Today this rambling Spanish Renaissance retreat provides the same gracious seaside ambience the Newport set demanded, plus the best Sunday brunch imaginable.

Flagler's overseas railroad met its demise in the 1935 hurricane, but much of his engineering legacy is used today, with U.S. 1 resting on the roadbeds that were painstakingly laid for his trains.

Key West is famous for its coral reef and vibrant diving possibilities, and numerous boats depart regularly for half- and full-day skin diving, snorkeling and deep-sea fishing. You can rent every kind of water gear available or sail away for a day of total relaxation.

Don't expect broad sandy beaches in Key West; small strands of the white stuff are all you'll see. The area's surrounding reef breaks the natural wave action necessary to deposit sand on shore, and in doing so adds its own dimension.

The remains of several island forts also capture attention, but the most spectacular is located 70 miles out in the Gulf of Mexico. Known as the "Gibraltar of the Gulf," Fort Jefferson National Monument covers a speck of land known as the Dry Tortugas. Ponce de Leon first landed here in the 1500s and, finding largesea turtles in the surrounding waters, named it Las Tortugas. Lack of fresh water on the island prompted the addition of Dry.

Said to be the largest brick structure in this hemisphere, the massive fortress was the biggest Civil War fort built. Dr. Samuel Mudd was among those imprisoned there for his alleged part in the Lincoln assassination. Visitors today are free to ramble at will and inspect former gun emplacements, view a video presented by the National Park Service and chat with park rangers who man the island fortress for three months at a stretch.

Picnic grounds, a boat dock with facilities (but no fresh water) and a perfect beach for snorkeling are part of the adventure. But the best part is getting to the Dry Tortugas: Seaplanes based in Key West make the 30-minute flight twice a day, equipping passengers for the four-hour stay with a cooler of soft drinks and full snorkel gear (tickets about S90). Key West Seaplane Service makes the trek in six-seater aircraft; pilots point out such landmarks as where Mel Fisher struck pay dirt.

Back on the mainland, U.S. 1 begins in Key West at Mile Marker 0. Across the street, a sign in front of the Monroe County Courthouse reads, "End of the Rainbow." Depending on your direction, or inclination, it just could be the end of the rainbow -- or the beginning.

If you go . . .

The Florida Keys recently put into effect a Keys-wide central reservation service offering one-stop accommodations bookings. On a trial basis through Jan. 31, callers to the Keys' toll-free vacation information number -- (800) FLA-KEYS -- may make bookings on the spot.

You also can write Florida Keys/Key West Visitors Bureau, P.O. Box 866, Key West, Fla. 33041.

Key West International Airport is serviced by American Eagle, USAir, Eastern Express, Pan Am and Airways International, all out of Miami International Airport; and Delta Commuter Com Air out of Fort Lauderdale International and Orlando International airports.

The Marathon Airport is serviced by Eastern Express via Miami.

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