From Papallacta the road follows the steep descent of the ríos Papallacta and Quijos rivers for 37km before reaching BAEZA , the largest town between Quito and Lago Agrio. Before the arrival of the conquistadors, the Baeza region was populated by the Quijos group. In 1559, Captain Gil Ramírez Dávalos was sent here to bring the 50,000 indígenas under control, and he founded Baeza with an eye to its strategic position.

 

Although set in pastoral hills at 1850m, Baeza identifies itself very much with the lowland Oriente to the extent that hotels are named after jungle themes, and the talk in town is never far from oil and the nearby pipelines. Colonization along the main highways nearby has replaced the forests of old with farming landscape, but patches of cloudforest remain on the steeper slopes, where birding is still reported to be good. Other larger areas of pristine forest are also within reach, as it's surrounded by protected areas, the Cayambe-Coca reserve directly to the north, Sumaco Napo-Galeras to the east, and Antisana to the southwest, so it's a convenient base for walks in the hills and expeditions into the remoter depths of the three reserves.

Baeza is split into three small and distinct parts. La Y de Baeza marks the junction of two highways, one heading northeast to Lago Agrio, the other south to Tena. Buses often stop here at the roadside restaurants and fill up with fuel. From La Y, you can see the rusting corrugated-iron roofs of Baeza Colonial about 1500m up the hill on the Tena road. Here, the old town still shows the trappings of its history, with little wooden houses lining a pair steep, cobbled streets up to a church. Across the Río Machángara, about 800m further along this road, Andalucía has grown steadily since it was founded in 1987 after an earthquake hit the area. Built on an ugly though quiet dual-carriageway to Tena, it is now substantially larger than its older neighbour and has all the town's services, the hospital, post office and Andinatel office.