Edinburgh confronts you with history at every turn. Look down or up and you’ll see features that intrigue, from the elaborate gothic tower on the city’s main shopping street to markings in the cobbles that denote former city limits. But Edinburgh is not a city-sized tourist museum; it’s a living city with a thriving bar scene (aided by a sizable student population), busy shopping streets, and an ever-growing number of restaurants. It’s also home to the U.K.’s largest group of cultural festivals, which ensures a huge influx of visitors every August. The Edinburgh International Festival brings theater, music, and dance to the city, though the Edinburgh Festival Fringe is equally established now, with its comic acts from around the world. There is also the Edinburgh Military Tattoo, which is a display of martial skills rather than something a drunken sailor gets on shore leave.

Among the historic buildings, it’s possible to spot some modern architecture, notably the new Scottish Parliament building, but the whole city is hemmed in by the picturesque surrounding hills and countryside, meaning that almost every sliver of land has already been developed—a fact that became all too clear to Neil and Marion Thomson when they were in pursuit of a plot on which to build. Having approached Richard Murphy Architects to design their modern retirement home, the couple spent three years searching for a plot of land, unaware that they were looking out the window every day at the perfect spot. That spot was the grass tennis court at the bottom of their steeply sloping garden, but securing it was just the start of a long slog to gain planning consent in a 900-year-old area of Edinburgh where the last new house was built in the late 1960s.

Richard Murphy finally won over the authorities with a three-bedroom “invisible” design complete with green roof and a curved glass front. The house is stepped down to make it look more like a piece of terraced garden than a 21st-century home, which means that it is partially underground, though two strips of skylights let the light flood in. Dwell recently spoke with the Thomsons about what it feels like to get the first new house built in their neighborhood in nearly 40 years.

During the lengthy planning process, did you ever feel like giving up?

Marion: We were so adamant that we wanted to build the house. On the drawing board it just looked so great. I think it was called “the secret house” in the planning stages in the office and I thought that was lovely.

Neil: Our contention, and Richard’s, was that it is a fallacy to think that good design using good materials can’t sit in juxtaposition with older buildings. Then it was a question of trying to make it sympathetic to the area and that’s where he came up with the idea of the green roof and trying to make it look like a terraced garden. That, coupled with the stone walls, as all boundary walls are here. It is Dunmore stone, which is similar to the sandstone that Edinburgh is built on.

What made you want to stay in Edinburgh?

Neil: It’s a nice mixture, an open type city. It’s a big village really, compared with the major cities down south. In retirement we can take the city or leave it. We don’t have to go to the center to work. We go in to shop or to go to the theater.

Marion: The Water of Leith river is at the bottom of the garden and you are in the Pentland Hills in minutes. I make it out there every day, that’s why we’ve got the dog [a Dalmatian puppy named Dyson]. He is not up to 20 miles yet, but he will be.

How do you feel about living underground?

Neil: As a surveyor, the thought of 600 millimeters [23 and a half inches] of earth on top of the roof—it was always my concern that it wouldn’t drain properly. But it has been ten months now and it is working fine.

Marion: I always just imagined a meadow growing up on the roof.

What do you like most about your home?

Marion: The light. Even on a Scottish gray day this place is not dark. The heat from the sun is amazing. It’s wonderful. We needed a large area outside as we eat breakfast out, even in the snow. We are hardy people. The door opens all the way across, so outdoors is like another room. It is funny, because 60-plus-year-olds are meant to move into little bungalows and be quiet, but we have always fancied modern and new. People would expect to see young executives here. But here we are.

Controversial from a political and aesthetic viewpoint, the Scottish Parliament building, designed by Enric Miralles, houses the new Scottish Assembly. It is best known for exceeding its initial budget by sevenfold, coming in at around $814 million.

This delightfully cluttered store is run by a group of young Scottish designers who sell their clothes, jewelry, and accessories in a youthful-feeling corner of the city that also houses other design shops.

Once a dorm for female medical students, this elegant Victorian became one of the city’s coolest boutique hotels in 1998; its 48 rooms feature a contemporary art collection by 30 up-and-coming Scottish artists.

Hard to miss, as it sits on a (long dead) volcanic base overlooking the city, this is the perfect place to get the lay of the land or delve into the city’s royal connections. A gun goes off at 1 p.m. each day, so set your watch and cover your ears.

This wide thoroughfare at the heart of historic Edinburgh is not to be missed. Stuffed full of dark, atmospheric bars and alleyways with names such as Fleshmarket Close, it’s the ideal place to get the feel of the city as well as pick up whiskey and tartans for the folks back home.

This chain has long been responsible for bringing affordable contemporary design to British homes. With everything from Robin Day chairs to cut-price cutlery on offer, it’s hard to leave empty-handed.

Unsure whether it’s a hotel with a bar or a hip bistro with some rooms out back, Rick’s is never going to be the quietest place to stay. But the boutique-style rooms are compact and comfortable, and they place you right in the center of the shopping district.

This 19th-century building on the outskirts of the city houses an impressive international collection, though its largest draw is the outstanding collection of modern British art. Henry Moore, Barbara Hepworth, and Francis Bacon are well represented, as is acclaimed Scottish architect Charles Rennie Mackintosh.