Lagoa das Furnas was one of my two favorite places to visit on Sao Miguel, a huge, calm, gorgeous…read morelake, home to flocks of placid ducks and geese, with excellent hiking trails up the mountains off the main path around the lake. The great draw for me was the quiet. It was possible to find near-total solitude early in the day, to breathe with trees, to listen to bird calls, free from the roar of tour bus engines. There is a small entrance fee -- very nominal IIRC, something like 50 cents for adults and older children, free for very young children.
This Lagoa is one of the three larger, better known crater lakes on the island. It's still slightly off the beaten track for international tourists, but is perennially popular with local vacationers, many of whom spend an entire day making cozidas, grilling, picnicking and strolling around it.
The hiking trails are well maintained and there's the intoxicatingly sweet smell of Kahili ginger flowers everywhere (those clusters of yellow flowers you see and smell all over the island). The paths the branch off from the main lake trail are cool and dark well into the middle of the day, offering respite from the heat of the sun. There's a lot to explore on these side trails: abandoned buildings, carved wooden statues, an old church, even a waterfall we heard of (but didn't see). The main, mostly flat trail is suitable for even young children, while many of the side trails branching into the mountains can be navigated carefully with an active, energetic three-year old, with some help on the larger steps (and a good carrier for when the baby steam runs out). Our six-year old sprang up them like a mountain goat.
Right by the parking lot at the northern tip of the lake, there are fumarolas, where it's a big deal for families and restaurants to cook all-day cozidas (stews) in the hot, bubbling, sulfur yellow mud. There are also restrooms (home to a good number of tiny, slender, beautiful cats), a lovely picnic area set among pine trees, a few vendors selling snacks, fresh juice, and souvenirs.
We didn't make it all the way around, but we hear the entire circumference of the lake takes about two hours to walk, with about 1/3 of the way along EN1-1A, a busy main road.