In Mexico, early on a Sunday morning, the sound of rapid shots in short succession would lead a traveler to think the worst. Lying rigid in bed, this gringa feared getting caught in “Narcos”-style crossfire.

The receptionist at the Hotel Matilda (from $409) explains it’s nothing more than fireworks, an age-old tradition of letting off rockets — at all hours, at all times of year — to dispel bad spirits. Phew!

For those wary of venturing beyond Mexico’s resort destinations, San Miguel de Allende is a good starting point. This colonial city, about 170 miles northwest of Mexico City in the country’s highlands, has narrow cobblestone streets bordered by thick stone walls and punctuated by giant wooden doors with intricate wrought-iron work.

Foodies and art lovers have been making the pilgrimage to San Miguel de Allende for decades, but an endorsement from Travel and Leisure earlier this year labeling it the best city in the world has catapulted this UNESCO World Heritage site to the top of savvy globe-trotters’ must-see lists.

In San Miguel, everything catches the eye, from the ornate brass mailboxes on centuries-old doors to the endless parades of locals wearing papier-mâché costumes. This town is a dream for walkers — and warm temperatures year-round help, too.

An early-morning balloon ride (from $150 per person) is the best way to see the city at its most seductive. Ballooning has a long tradition in the central Mexican state of Guanajuato, where San Miguel is located. From the air, you can see the tiny lights of a hundred little kitchens flickering to life against the surrounding soft-sloping mountains. Ogle the town’s enduring trademark — its stunning, Gaudi-style pink Parroquia church — from above.

San Miguel been on the cultural map for centuries, it was a hot spot back in 1542 as a destination for silver traders between the capital and other northern cities. But a wave of hot openings and American expatriates makes it feel like the city is having a moment — a bit like Paris in the 1920s.

A St. Regis Hotel is rumored to be on the way. The boutique-y, upscale L’Otel (from $295) opened a little over a year ago in Dôce18 “concept house,” a gorgeous historic building teeming with restaurants and bars. There, stop by an outpost of local French bakery Cumpanio, as well as Recreo, a design store offering a fashion-forward twist on the Mexican poncho.

Though there’s an airport a 90-minute drive away in León, New Yorkers will find it easiest to fly through Mexico City.

Many Americans have already recognized San Miguel’s allure — including San Francisco-based interior design stars Andrew Fisher and Jeffry Weisman. Their tannery-turned-home here, Casa Acanto, was featured in Architectural Digest; it’s available for rent though real estate firm Premier San Miguel (about $10,000/week).

This little city has packed a punch from its early beginnings. It was the place where the Mexican independence movement kicked off. The dragoons, or soldiers, who fought the Spanish are revered in the name of Casa Dragones, a 2008-launched homegrown tequila brand. The revolutionaries were based in downtown San Miguel building that now houses its office and private event space. (The company makes its small-batch sipping tequila from blue agave in Jalisco, some 200 miles west.)

At the heart the community championing San Miguel are the folks behind Casa Dragones. Media investor Bob Pittman is a co-founder; his wife Veronique co-founded La Calaca, an area day-of-the-dead festival, running Nov. 1 to 5 this year. Together the New Yorkers entertain a collection of artisans, chefs, filmmakers and businesspeople when they’re in town.

At a summertime party for a local film festival in Casa Dragones’ courtyard, their friend Brigham Golden — an anthropologist from New York City who turned a side hustle as a DJ into a living here in San Miguel — mixed some tribal sounds with cumbia, a Latin American music genre, to bring everyone to their feet.

Also at the party was Spencer Tunick, the photographer who specializes in massive group shots of naked people. He’s also a big fan of San Miguel, and even got some locals to pose in their birthday suits recently.

“San Miguel is in the center of our country. You’re going to be exposed to a lot of different people from Mexico,” says Bertha Gonzalez Nieves, Casa Dragones’ co-founder, who is also known as the queen of tequila.

“The town elevation is so high that the views, the sunsets and the sunrises are quite unique to the region.”

For a tequila tasting — another requisite activity here — visitors can book the brand’s specially designed tasting room at Dôce18. Decorated with shiny black obsidian rock mined in Mexico, the tiny haven is a spectacular spot for intimate cocktails.

See, San Miguel is elegant and sophisticated but not pretentious — making it a draw for Mexicans, too.

Just look at its exploding food scene.

One of Mexico’s most prominent chefs, Enrique Olivera, has hung his shingle at world-famous Pujol in Mexico City. But he’s also behind Moxi at the Hotel Matilda, which serves up tasting menus featuring salted shrimp with chipotle mayonnaise and suckling pig.

Then there’s Matteo Salas, also at the forefront of the restaurant scene here.

Gobble up his creations at his restaurants: Jacinto 1930 and Aperi. At Aperi, you can kick off a decadent dinner of octopus and duck with a cocktail of gin and lemonade.

The latter is topped with a slice of prickly pear, which acts as a natural headache cure and aides digestion.

For a more low-key option, the guava margaritas at Don Taco Tequila are thirst-quenching after a day strolling the picturesque streets. The restaurant also serves up different salsas. But be warned, the dark-brown habanero dip just might burn a hole on your tongue. Even the waitress said it was too much for her!

Another essential experience: rooftop cocktails at Luna bar atop the Rosewood hotel (from $344).

The breakfasts at this stylish stay are beyond expansive. A highlight is the cajeta, a caramelized sauce of goat milk and cinnamon drizzled on bread.

Thankfully, in spite of its growing popularity among foreigners and Mexican citizens alike, San Miguel remains eternally enchanting.

The author was a guest of the Hotel Matilda.