Teotitlán del Valle, about 30 km east of Oaxaca on the road to Mitla, is a Zapotec village that has been producing textiles for at least 2,000 years. Today it is Oaxaca's weaving capital: virtually every family here makes and sells wool rugs, and the quality is extraordinary compared to the mass-produced versions sold in city markets. The finest pieces use natural dyes — cochineal for reds, indigo for blues, huizache bark for yellows — and can take weeks to complete a single rug.
Walking the village is itself worthwhile: the church was built on top of a Zapotec pyramid and incorporates pre-Hispanic stones in its walls. The market on Sunday mornings draws weavers from the surrounding area and is the best time to buy. If you want to understand how the dyes are made, several families offer demonstrations; the cochineal process (tiny insects crushed to produce a brilliant crimson) is particularly striking. Prices here undercut the Oaxaca boutiques significantly for comparable or better quality.