Quilotoa lagoon (Quilotoa Lake), considered one of the most beautiful spots in the Ecuadorian Highlands, is located in the crater of an extinguished volcano, in the province of Cotopaxi, Ecuador.
Chugchilan is the nicest town in the area with lodging -or camping- facilities. Great ecolodges such as Black Sheep Inn; or, if you prefer, a clean and cozy family-run lodge called “Mama Hilda” are, in my opinion, the best options in the area. This location is great for a couple of days of relax surrounded by the silence of the mountains and the quiet life of a tiny town.
You can take buses to Chugchilan in Latacunga bus station (at 10h30 or 11h00), you can also hire 4×4 jeeps or pick-up trucks.
But if you want to spice your visit to Chugchilan with some adventure, biking from Chugchilan (3200m, 10400ft) to the edge of the crater of Quilotoa (3800m, 12470 ft) is a great option. It is a tough 3 hour ride uphill. It is a great acclimatization challenge if you are planning to climb Cotopaxi volcano. The bike downhill is fun and easy, but it can get really cold, so do not forget to bring gloves and a waterproof jacket. (Last time I brought my own bike, but I am pretty sure that there are bikes available in the lodges)
Another smoother option is to hire a pick up truck to the edge of the crater and hike all the way around the Quilotoa lagoon, it is an amazing adventure with great views of the highlands. The hike is easy, not too
steep and takes about 5 hours. Again, this will be in high altitude spots, so remember to bring your warm clothes and waterproof gear.