Since the main inhabitants here are Tibetan, the foods available in Diqing mostly features Tibetan flavors. Irresistible delicacies here include glutinous rice cake, buttered tea, and barley wine. Most of the restaurants here serve Tibetan food, and for foreign tourists, the best choice are the Restaurants in the Yongsheng Hotel.

With the development of the tourist industry, numerous western restaurants have begun to appear in Shangri-la. Although not many as in Dali or Lijiang, there are still a few places to choose from. The best western restaurant in town is probably the Aku Lemu Cafe in the Gyalthang Dzong Hotel. The western restaurant in the Yongsheng Hotel also serve nice food. The Tibetan Cafe is another restaurant with nice western food.

For Chinese food other than the strong and rich Tibetan food, the hotel restaurant in the Diqing hotel is a nice place to refresh your taste buds. Most of the other hotel restaurants also have a variety of Chinese food available. The Metok Pema Restaurant in the Gyalthang Dzong Hotel is one such spot. The Tibetan Cafe has a casual Chinese menu ideal for backpackers.