Glowing recommendations from Lonely Planet single out the city as one of the best places in the world to cycle, watch birds and walk your dog.
Dunedin is the only New Zealand city to make the travel company's annual top 10 travel lists - and does so three times.
Otago Peninsula has been named as the top cycling destination in Lonely Planet's Best in Travel 2010.
"Get ready for steep climbs, fast descents and the odd albatross to keep you company," the book notes.
Taking a breather on the route yesterday, Peter Hurring and Greg Lapwood, both of Dunedin, said they were not surprised by the recommendation.
"It is a bit of a hidden gem," Mr Hurring said.
Tourism Dunedin chief executive Hamish Saxton said the publicity was a "real feather in the cap for Dunedin", and the city could expect increased visitor numbers as a result.
Dunedin Mayor Peter Chin said the cycling recommendation highlighted the work that has gone into cycleways in the area and the importance of completing "that vision".
The city's ratings proved "Dunedin was a special place".
Dunedin - and Queenstown - rated a mention in the guidebook's recommendation of New Zealand as one of the top 10 countries in the world to visit: Dunedin for the Masters Games, and Queenstown for its coffee, adventure sports and Winter Festival.
