Korean Restaurant
Tasty Korean fare including seafood pancakes, sushi, zucchini rolls, table-top bbq, bibimbap. They rent bikes from the front of restaurant 20-30 RMB, and the boss even has a private stash of higher quality mountain bikes in storage for a slightly higher rental price. He will give you his cell number and come out to help you if you have any trouble with the bikes.
Compass Cafe
Serves excellent authentic Western food homemade spaghetti sauce! and delicious cakes. Equiped with an Espresso machine. Cozy atmosphere, it has several heaters and is great for family. Free wireless available. Recently opened a bakery "In & Out" next door selling breads, muffins and other savouries.
Karma Cafe
Good food and hospitable staff. Owner Afang speaks perfect English. Not located in busy old town but off the beaten path. Tibetan house and meals, though western meals are also served. Rooms available, though only two rooms.
Hongxin Restaurant
Decent restaurant, serves some Tibetan dishes baba, pipa meat.
Momos
Serves Nomadic style momos Tibetan Dumplings and great Sichuan Food. Comfortable and friendly.
Puppet Restaurant
Great Tibetan food in a warm and friendly atmosphere, although there is only one page of the Tibetan food in their menu. They also serve Indian and Korean cuisine. Full of locals rather than tourists. If you have a sweet tooth, 奶渣çé¢å¢ is worthwhile trying.
Qionglai Restaurant
Great Sichuan dishes.
Sean's Cafe No 2
Authentic Tibetan food, great for breakfast. The Tibetan porridge and yak cheese dumplings are recommended. Daisy, daughter of the Tiger Leaping Gorge's Sean, speaks great English and can give good local travel advice.
The Shangri-La Yak Cheese Shop
A specialty cheese shop that produces locally sourced yak cheese with Western methods. Great selection of local wines to pair with the cheese, as well as a wide selection of cheese-inspired local and Western dishes.
Soyala Tibetan Diner & Bar
Burgers, patties and dumplings are made with free range 100% organic Yak meat and burger buns are prepared daily. The restaurant staff are former residents from the Children Charity Tendol Gyalzur in both Shangrila/Gyalthang and Duilong/Lhasa. The owner is a Swiss-born and educated ethnic Tibetan married to a local Tibetan. Good pizza, great Lentil soup, and tasty Shangrila brand beer go unfiltered.