Santiago de Chile enjoys one of the most spectacular settings of any world capital. Sprawled across the fertile Santiago valley, 100km (62 miles) from the Pacific coast, the city is dominated by the mighty Andes mountains to the east and a smaller coastal mountain range to the west.

However, the city's geography is not entirely in its favour - its location is a sort of natural bowl, which has a tendency to trap smog. This pollution may cloud your view of the mountains, especially in the winter.

Many visitors still regard Santiago as little more than a convenient place to spend the night before heading elsewhere in search of Chile's natural wonders. But to avoid Santiago is to overlook a quirky, vibrant city.

Travellers prepared to venture beyond their hotel lobbies will be rewarded by colonial churches, lively markets, colourful street life and a surprisingly varied restaurant scene and nightlife. And, of course, the snow-capped mountains are within easy reach, while the city's position halfway up Chile's 'string bean' shape means Santiago residents enjoy a Mediterranean climate - perfect for visiting the many vineyards dotted around the city.

Economically, Chile is one of the most robustly healthy of all Latin American countries. The constant whirr of skyscraper-building cranes in Las Condes, Santiago's main financial district, is testament to this relative prosperity. In the bustling city centre, modern structures sit alongside colonial buildings - here you can see the 18th-century cathedral reflected in a glass-fronted business tower block.

The city's architecture is not always as inspiring. Away from the affluent, manicured residences of Providencia, Las Condes and La Reina to the east of the city, there are areas which reflect the large gap between rich and poor. Callampas (shanty towns) to the south are reminders of this uneven wealth distribution, although the contrast is not as stark as it is in many other Latin American cities.

Founded on 12 February 1541 by a small band of Spanish conquistadors led by Pedro de Valdivia, Santiago had an unpromising start. Within six months, indigenous warriors had attacked and almost destroyed the settlement and the Spaniards were besieged on Cerro Santa Lucía (a hill, now a popular city park). The eventual arrival of reinforcements from Peru enabled the city to be rebuilt and Santiago settled into its colonial role as a provincial capital within the Viceroyalty of Peru.

After independence from Spain in 1818, Chile emerged as the most economically dynamic of the new South American republics. The growth of the country's agriculture and mining industries served to boost Santiago's status and, throughout the 19th and 20th centuries, the city experienced large-scale immigration from Europe.

Chile stayed relatively free from the political turmoil of neighbouring countries, but on 11 September 1973, Santiago was the hub of the military coup that brought General Augusto Pinochet to power. His 17-year dictatorship bought brutal repression and sweeping economic reforms to the country.

Today, Chile's mineral wealth is key to the country's success, especially as a result of high demand from China for the country's copper reserves.