Providence, the capital of Rhode Island, is no longer in Boston's shadow. Over the last few years, this New England city (an hour-and-a-half drive from Beantown) has really come into its own. The arts scene is buzzing with new galleries and museum expansions, and gourmet restaurants and trendy cocktail lounges have sprung up. Plus, the city's most cherished attraction, an art installation called WaterFire by artist Barnaby Evans (a series of bonfires on Providence's three rivers) runs from May to October. There are also plenty of up-and-coming neighborhoods with their own distinct flavors. One of the most talked-about of these is Federal Hill, a primarily Italian enclave sandwiched between I-95 and Route 6.

Federal Hill, so named for the area's many federal-style houses, had fallen into disrepair in the 1980s when most of the Italian immigrants fled the city for the suburbs. It's been on an upswing during the last decade, as young families, artists, musicians and recent graduates from Providence's prestigious Brown University and the Johnson & Wales Culinary School have put down roots. You'll now find bohemian boutiques, cutting-edge galleries and hip restaurants on the main thoroughfare, Atwells Avenue, alongside Old World bakeries and grocery stores. 

The heart of the Hill is DePasquale Plaza, a leafy pedestrian square lined with open-air cafés whose focal point is a splashing fountain surrounded by wooden benches. It's one of Providence's best people-watching spots and very much like a little slice of Italy, with locals and tourists enjoying a glass of wine at outdoor tables as they listen to strolling musicians. Recently, a new boutique hotel called Dolce Villa (dolcevillari.com) opened right on the square, offering 14 ultra-modern suites featuring white-on-white bedrooms and living areas with white leather sofas, chairs and flat-screen televisions. Kitchens are equipped with stainless steel refrigerators and stoves (some rooms offer gas fireplaces and plaza-facing balconies). 

The owner of the hotel, Gianfranco Marrocco, also owns a popular restaurant on the square, Geppetto's (geppettospizzeria.com), a casual restaurant known for its pastas and grilled pizza (try the Old World and Mediterranean styles). Other Federal Hill restaurants worth checking out include Siena (sienaprovidence.com) and Mediterraneo. Siena is a recently opened Tuscan restaurant owned by brothers Anthony and Chris Tarro, whose parents grew up in Federal Hill. It's always buzzing here—even the 12 barstools fill up for dinner. Order a glass of Prosecco and enjoy dishes such as pappa al pomodoro (traditional tomato and bread soup), broccoli rabe and sweet sausage pizza, homemade potato and ricotta gnocchi and tagliatelle alla Bolognese. Mediterraneo serves a mix of traditional and modern Italian food, including grilled salmon marinated in olive oil, white wine and garlic, and gnocchi in a tomato and basil sauce.

Late night in Federal Hill, most people tend to enjoy the scene at DePasquale Plaza, lingering over a tiramisu dessert and a frothy cappuccino. But for those who crave a bit more action, there's Lili Marlene's on Atwells Avenue. There's no visible sign on the door, but you can tell it's the neighborhood hotspot from the hip crowd who flock to this New York-style lounge named for an old WWII soldiers' song. Interiors have a funky Moulin Rouge vibe (red velvet curtains, ox-blood upholstered banquettes), the drinks are cheap, the music is good and the pool table attracts the best players in town. 

The next time you visit Providence, be sure to explore all the city has to offer, especially in Federal Hill, which despite its cosmopolitan edge, still retains its Old World charm.