Despite being passed over by the International Olympic Committee as the site for the 2012 Summer Olympics, Madrid is a spirited and sophisticated city that has evolved into a world-class European destination. Overshadowed for a time by archrival Barcelona, with its Olympic glories (Barcelona hosted the 1992 Summer Olympics) and cutting-edge everything, Madrid has reinvented itself — shedding its serious image (it’s the capital city of Spain) without losing its old-world charm.

I knew rumors of the “new” Madrid had to be true when my Barcelona pals began extolling the wonders of the city, the warmth of the Madrileños and the quality of the restaurants. Boasting some of Spain’s best food, fashion and art, Madrid is quickly emerging as a destination of choice for sophisticated travelers. At the same time, Spain’s economy has become one of Europe’s most vibrant, having experienced 12 years of continuous growth. As I drove into Madrid from the sleek new terminal at the Madrid-Barajas International Airport (MAD), it was impossible to miss the numerous cranes that signaled new hotels and the expansion of already stellar museums.

I bypassed the Ritz and the Palace, Madrid’s grand old hotels, for the more intimate Hotel Orfila, a stylish boutique property converted from a 19th century mansion. Located in a quiet residential neighborhood, this 35-room hotel is part of the prestigious Relais & Châteaux group. I was in Madrid to attend a wedding, and the knowledgeable staff at the Orfila delivered the wedding gift to the proper place at the right time. They also arranged my somewhat complicated transportation without a hitch.

Other new hotel options include the ultra-sleek Hotel Urban, centrally located across from the Spanish Parliament. Among its attractions are public rooms that house part of the art collection of the owner, Catalan businessman Jordi Clos. I stopped in for a drink at its lively bar, which is popular with European travelers and, given its location, local politicians. The hotel with the most buzz, the colorful Puerta América, has a façade designed by noted French architect Jean Nouvel. Each floor is created by a different well-known architect or designer — David Chipperfield’s tents set over sleeping platforms, for example. Another plus: It’s only 10 minutes from the airport.

Thanks to the wedding, I got a glimpse of real Spanish life that I otherwise might have been missed. The stylish Spaniards were so well attired in their brightly colored gowns that my Armani-clad self felt like a dowdy New Yorker. Conversation was animated, and eventually turned to Madrid’s real estate prices, which like Manhattan’s are rising with no end in sight. Some locals attributed Madrid’s latest growth spurt to its setting, a plateau with endless plains that provide space for continued expansion. While there was some concern about a burbuja, or bubble, most Spanish economists predict prices will eventually decline, albeit gradually. I saw this growth firsthand another day, while I was driving through suburbs full of new villas and apartments sprouting like tulips in the spring.

After the nuptial festivities, I was ready to dive into the city chosen 450 years ago by Hapsburg King Philip II for his court. It was a joy revisiting the architectural remains from that period and wandering the narrow streets of old Madrid to its focal point, the expansive Plaza Mayor. (Many of Madrid’s narrow roads gave way to stately Parisian-style avenues in the 18th century under French Bourbon rule.)

A morning stroll along the elegant Paseo del Prado brought me to what locals call the “Golden Triangle,” home of Madrid’s three incredible art museums, all of which have undergone or are completing impressive expansions. The Museo Nacional del Prado, with its overwhelming collection of Velázquez, Goya, and El Greco, will unveil its new section this year. Meanwhile, the Museo Thyssen-Bornemisza, which houses one of the world’s most renowned private art collections (now owned by the Spanish government), has just opened a new wing that includes the restaurant Paradis — an instant dining favorite among Madrileños. The nearby Museo Nacional Centro de Arte Reina Sofia is a showcase for contemporary works. Its striking new wing, another Jean Nouvel design, has an unusual triangular roof with openings to admit natural light. Picasso’s famed Guernica is on the second floor. Not to be outdone by its neighbor, the Riena (as it is referred to locally) also has a cutting-edge restaurant — run by Michelin-star chef Sergi Arola of Madrid’s La Broche — which many consider to be the city’s top dining attraction. I was amazed to learn that the museums are open until midnight during the summer, leaving ample time for shopping in the upscale Salamanca district.

In Spain, dining out is a favorite pastime. While much national excitement centers on the wild, innovative cooking of Catalan chef Ferran Adrià, Madrid offers an array of choices — from imaginative and ultra-modern to old classics and casual tapas bars. Adrià’s cooking has arrived in Madrid at La Terraza, where one of his disciples works behind the stove. And unlike Adrià’s El Bulli, outside Barcelona, reservations here are still obtainable.

I visited La Broche, where Sergi Arola (another Adrià alum) prepares such imaginative dishes as mushroom carpaccio and swordfish with wasabi. One of my favorite meals was at the less-inventive Santceloni in the Hotel Hesperia. The roasted veal at this two-star Michelin restaurant was the best dish of my visit. At another venue, Balzac, the appealing contemporary menu ranges from a bloody-mary sorbet amuse-bouche to roasted tuna with summer truffle vinaigrette.

Delicious food also can be had at the old standby Casa Lucio, Madrid’s answer to Brooklyn’s Peter Luger Steak House and a favorite of King Juan Carlos I. The specialty here is roast lamb and beef, but the fish is equally good. First-time diners must try the revuelto Lucio — eggs scrambled with fried potatoes — named after the restaurant owner. Lucio actually worked here when he was 12, and bought the dining venue about 25 years ago. Los Galayos, another traditional restaurant on Plaza Mayor, seemed touristy, but my friends assured me otherwise. This is a good place to sample Castilian specialties such as suckling lamb and pig prepared in a wood fire. Of course, scattered about the city are many extraordinary tapas bars, with their little plates and great wines.

At first, dining in Madrid can be a bit of an adjustment. Locals eat lunch between 1:30 and 3 p.m. (three-hour lunches are not uncommon), and dinner is always after 9 p.m. Well after midnight on a warm September evening, nightspots such as Ki, one of the new clubs, were packed. We stopped by Chicote, a Hemingway boîte well known for remaining open during the Spanish civil war (1936-1939). Though I missed Chocolatéria San Gínes — it was 4 a.m. — for churros and thick hot chocolate, I did manage to get my chocolate fix later in the morning at a cafe on the Plaza Mayor.

I had never thought of Madrid as a dining haven, but now I’d like to go back to visit the venues I missed, including Dassa Bassa, where yet another Adrià alum does the cooking. And then there’s Chantarella, Goizeko Wellington and El Chaflán.