Among the restaurants packed into the old town, Konoba Stari Grad is one of the more reliably good choices for Montenegrin seafood. The menu follows the coast: grilled fish sold by weight, black risotto, mussels from the Bay of Kotor, and the local platter of mixed seafood that most coastal konobi offer in summer. The setting — stone walls, wooden tables, a terrace wedged between old buildings — is exactly what you'd hope for inside the old town.
Prices are reasonable by Budva standards (which are higher than the Montenegrin average thanks to the tourist premium). The grill is the strongest part of the menu; opt for whatever fish looks freshest that day. Reserve in summer evenings, when old town restaurants fill quickly.