Oaxaca is famous for its mole negro (one of the seven moles that are served in some restaurants and that can be purchased at the markets) and has a thriving restaurant scene, well-known to American and European tourists. Unfortunately, this means that prices are not as cheap as they would be otherwise. Como Agua pa Chocolate, a restaurant based on the popular movie and just off the Zocolo on a second floor, serves traditional Mexican favorites as well as more innovative fare. Despite the number of non-Mexican diners there, it is very welcoming with excellent food.  Once the flambed dessert process starts it can tempt every table. You can find a number of new restaurants around the square, which have been written up in Bon Appetit and the New York Times, but be careful to read other specific reviews as some are very overpriced and feel like you are dining in New York, not Mexico.  Several restaurants serve excellent crepe dishes, especially those with squash blossom fillings.   

Oaxaca is also known for fried grasshoppers, known as chalupines, which you can sample at many restaurants and are served from large piles at the markets.   Many markets have stands that sell large peeled magoes on a stick . 

Street food includes everything from hot dogs to grilled corn slathered with butter and cheese. Most street food can be purchased for under $1 US dollar. Hole in the wall restaurants serve delicious tacos al pastor made to order, also at low prices.