I was a reporter living in Hong Kong in the early 1980s when I fell hopelessly in love with Macau. Founded by the Portuguese at the height of its world empire more than 400 years ago, the six-square-mile coastal territory is the oldest European settlement in Asia. A densely settled city full of pastel-toned Iberian architecture, plus two islands connected by bridges and causeways to the mainland, Macau appealed to me as an endearing relic, a place where I could still witness the fading elegance of a brilliant, bygone age.

So early on Friday afternoons, I'd slip out of the office to catch one of the old ferries that would steam westward, across the 40 miles of China's great Pearl River Delta. As the skyscrapers of Hong Kong receded I'd lounge on an old canvas deck chair and put my feet up on the railing to revel in the cooling breezes off the South China Sea. Flush with a week's pay in my pocket, I'd order a chilled bottle of Portuguese vino verde--a very young, slightly tart green wine. All was well with the world.

While the British colony of Hong Kong seemed boastful and bloated by its every success, nearby Macau was tiny, calm and quiet behind its shuttered windows, serene and exhausted with the strain of trying to maintain some bit of its 16th-century splendor. For expatriate Hong Kongers--British police superintendents, Australian airline pilots, American journalists--Macau was like a beloved old aunt. A bit impoverished perhaps, woefully out of date to be sure, but always welcoming. Macau renewed our faith in the possible goodness of life, simply by continuing to be there in a world that was changing too fast.

So when opportunity recently took me back to Hong Kong, I leapt at the chance to see the old town one more emotional time, before its historic return next week to China after 442 years of Portuguese rule. Like Hong Kong, this European outpost will be handed back to the Chinese government, another inevitable step in the continuing process of global decolonization.

This time the voyage from Hong Kong took a mere 60 minutes. Macau's decrepit ferries have been surpassed now, replaced by a fleet of sleek, high-speed Boeing jetfoils that skim the waves at nearly 70 mph on huge, ski-like hydrofoils. I staggered off my vessel, not so much from the speed but from the shock.

I had hopefully imagined the port unchanged, a genteel place of villas and plazas built by long-dead Portuguese sea captains, a city of pedestrians, bicycles and pedicabs trundling over cobble-stoned streets. My hopes were in vain, of course. There's been a wave of change in Macau since my last visit, and the oldest European port in Asia has become a modern city. Half the harbor has been filled in and developed, scores of new high-rise buildings can be found around the city, and most of the wonderful old pedicabs have been muscled off the roads by gleaming auto taxis.

Most of the colonial Portuguese have left Macau. The rest of the population--the 95 percent of Macau's 450,000 residents that are Chinese, and the Macanese, Eurasians who have long played an important role in Macau's culture--are said to be welcoming the change of administration, to take place in a ceremony as well-crafted as the handover of Hong Kong in 1997. Under the agreement struck in 1987, China promises to respect Macau's existing social and economic systems and lifestyle for 50 years after transition.

Regardless of how that promise plays out, for now Macau remains the only place in China where gambling is legal. Each weekend Macau witnesses the arrival of thousands of Hong Kong Chinese who stampede out of the hydrofoils and beat a path to one of the city's nine casinos. I, too, followed the furious flow toward the neon-lit Lisboa Casino, the oldest and best known of the bunch. Once this busy harbor-front nightlife district had been the site of scores of pawnshops, their 24-hour purpose made clear by rows of gleaming gold Rolexes set behind polished plate-glass windows. Discreetly displayed on the bottom rows were sets of gold teeth. These last, uniquely Macanese artifacts always made me shudder: Who was the more desperate, the ruined gambler who had sold his teeth for a ticket home to Hong Kong, or the sad sap who spent his unexpected windfall on a set of someone else's golden choppers?

Alas, the pawnshops are gone, replaced by their technological successors, ATMs. Some customs persist, however: Should you suffer a string of bad luck at the gaming tables, and decide to borrow a few shekels from Macau's sympathetic loan sharks, you will still be frog-marched smartly to the pier and "accompanied" back to your bank in Hong Kong. Your escorts will be two very large men, with a colorful array of tattoos but severely limited social skills.

The Chinese have said they will take up the question of renewing gambling licenses in 2001.

For decades, with the help of Hollywood films and trashy airport novels, Macau has suffered from--and sometimes savored--a lurid reputation as a haven for smugglers, gamblers, Jezebels and spies. A hundred years before Hong Kong or Tokyo came to dominate the Asian financial scene, Macau was the bullion broker of Asia, a port where gold and other goodies could be brought in with no questions asked. Naturally this reputation attracted legions of dodgy characters, and reports of men with judiciously theatrical nicknames--"Twin-Nostrils Li" or "Five Fingers Fung"--would appear regularly in the press, burnishing the legend. As recently as this fall, prosecutors won a big victory over local gangs with the conviction of a mob boss named "Broken Tooth" Koi.

As I exited the Casino Lisboa several hundred patacas poorer, I noticed that the great bronze statue of a Portuguese admiral on horseback that I'd seen so many times no longer enjoyed its prominent position just across from the casino. The figure of the famous one-armed Portuguese military man beating off Chinese assassins with a braided bullwhip had been quietly carted away to Portugal where it will, no doubt, terrify generations of Portuguese children, just as it has generations of Macau's Chinese schoolkids.

While Hong Kong Chinese visitors have been drawn by the gambling, Macau's seduction of Westerners has always been based on its charming Portuguese architecture and mellow Iberian ambiance. Happily, despite the high-rises, I could still see the old Guia Lighthouse, set on a hill directly above the arrivals pier. Built in 1637, more than 200 years before the British sailed into Hong Kong, the fortress today houses the oldest lighthouse on the China Coast.

I could also spot the old Monte Fort. Here, a plaque engraved in Portuguese dated 1622 commands visitors to: "Stop! Take heed! Consider briefly the beautiful history of our country. Enter proudly and hold your head high for you are a soldier of that country." At the Old Protestant Cemetery, I paused for a few moments to ponder the gravestones of missionaries, merchants and seamen, poignant reminders of tragic, premature deaths in faraway, fever-ridden Asian outposts.

I was also keen to reacquaint my taste buds with Macau's superb cuisine, a marvelous melange of flavors from Africa, India, Malaya and China, and which is now found nowhere but Macau. As anyone who has lived abroad knows, there's no expatriate more patriotic than a European chef. Thus it's seriously claimed that the Portuguese food served in Macau is more delicious and authentic than anything found in the Old Country. Grilled sardines and rich rabbit stew are favorites, as are Portuguese sausages simmered in olive oil. But other popular choices include caldo verde (delicious green vegetable soup thick enough to stand a spoon in) and bacalhau, the famous codfish dish that can be served baked, grilled or fried.

For me, though, there's no question that Macau's greatest culinary gifts are its Macanese dishes--an extraordinary mix of recipes collected from Portuguese colonies in Brazil, Africa and Asia. An example of this is African chicken. Invented in Angola, spiced up in Goa, improved in Malacca and perfected in Macau, this tongue-tingling, sweet yet wonderfully spicy dish contains nearly a dozen ingredients including fresh dried coconut, peanut butter, fresh ground garlic, sugar, chili, sea salt, black pepper and cooking wine.

I savored this historic dish, along with a plate of grilled South China Sea chili prawns in one of my favorite restaurants, a little cafe called Henri's Galley--which, except for the prices, has remained unchanged for nearly a quarter of a century. I asked to speak to the Great Man himself but, just as in the 1980s, afternoons were reserved for his siesta.

Though the European influence is still visible in Macau's architecture and culture, not every site is centuries old or built for the greater glory of Portugal. On Saturday night I trekked to the top of the tiny territory's highest peak, windy Barra Hill. Here a massive 70-foot white-granite statue of the Chinese sea goddess A-Ma overlooks the city. Weighing a thousand tons, requiring 120 sculptors eight months to complete and dramatically flood-lit at night, the statue is one of several recent farewell gifts from the Portuguese nation to the people of Macau. The goddess is especially venerated among locals as the name "Macau" translates from the Chinese A-Ma-Gau, meaning "the bay of A-Ma."

In Macau, there are two times a week when you are expected to be at a specific location. Saturday nights are for restaurants or nightclub hopping. And Sunday mornings are for Mass. And so early on Sunday morning I found myself in sleepy Taipa Village, across the harbor from Macau proper on Taipa Island. Here I met Sister Juliana Devoy, rushing to make 8 a.m. Mass in the village's little 114-year old Our Lady of Carmel Church.

The American-born sister has lived in Asia for 32 years, the past 10 in Macau. It is a place she clearly loves. Asked her concerns about the approaching handover, she mused about not having Catholic holy days like All Souls' Day or the Feast of the Assumption as public holidays. More importantly, she is worried that Macau's social services for the poor, which the government has always been happy to let the church handle, may be neglected even more under atheist-communist rule.

"Only 10 percent of Macau's population is Catholic. But more than half of its children attend Catholic schools," she told me. This, together with the fact that the Portuguese colonial administrators and their families were all Catholic, has allowed the church to hold far greater sway in Macau than its small size might indicate. But all this may soon change.

It's said that Britain's Queen Elizabeth thinks the whole world smells like fresh paint. That's probably the impression that the Portuguese president and his aides will get when they arrive for the handover ceremonies that begin at midnight on Dec. 19. Lush gardens have been planted, sidewalks painted and repaved, and the city's classic blue-and-white porcelain road signs have all been dusted off.

The Macau government will spend more than $30 million on the ceremonies, and just to make sure that everyone knows who will soon be ruling the roost, the Chinese government is having 8 million new Macau flags produced in factories in Shanghai. That's enough to give 17 pennants each to every man, woman and child in Macau, with plenty left over for the nearly 3,000 foreign journalists scheduled to cover the big day.

To find out what some Westerners living in Macau felt about this heady occasion, I spoke to Liz Thompson and her husband, Graham. A British couple who've made their home in Macau for 16 years, they've long been involved in the enclave's tourism industry. In the 1980s they started a delightful company called Macau Mokes, essentially Macau's first car rental agency. Most of Macau's tiny roads were built for nothing larger a horse, so Liz and Graham imported from Portugal a Go-Kart-like contraption called a Moke. Today the Grahams are publishing a Macau dining guide.

"True, there's been a lot of changes," Liz told me with obvious affection for her adopted home. "But scratch the surface and you can still find the old Macau underneath--tiny alleyways, temples, old churches, the island villages, little pockets of fascination. There are still antiques restorers, incense makers, woodcarvers and, out on Coloane [along with Taipa, one of the territory's two islands], there are still junk builders, where the boat-building techniques have not changed for hundreds of years.

"Macau has always had much more of a Chinese feel to it than Hong Kong, so I don't think that we are going to feel all that emotional. The Chinese troops are scheduled to come in over the new Lotus Bridge at midnight. Our idea is to get together with some friends and have a picnic on the peak of Coloane Alto--near the statue of A-Ma, and watch the troops come marching in."

On my last night in Macau, a windy and misty evening, I walked alone along the pedestrian path to the very center of the high, coathanger-like Taipa Bridge. I wanted to see the cheery lights of the little city one last time. Every seven seconds, my old friend, the Guia Lighthouse--which in years past had guided me home from the type of nightspots not fit to mention in a family newspaper--would flash its powerful beams across the dark waters. Once, not so many years ago, I had watched bat-winged junks track gracefully across these waters. Though appearing barely seaworthy, these lissome boats had been sailing these seas since the time of Christ.

Just as I was about to leave, I spotted an old junk, motorized now but still noble, appear in the sultry darkness. It passed beneath the bridge. I waited for many minutes, hoping to get a better glimpse as it came out the other side. But it never did.

Perhaps I misjudged its location in the dark waters. Or maybe I had merely seen a ghost.

Steven Knipp last wrote for the Travel section about the German-influenced city in China called Qingdao.

DETAILS: Macau

GETTING THERE: The best way to visit Macau is to travel there from Hong Kong. United offers connecting service to Hong Kong from all three Washington area airports; fares start at about $915.

Jetfoils depart Hong Kong every hour around the clock. Fares average $20 (U.S.) each way. Always buy round-trip tickets in Hong Kong to prevent having to deal with ticket scalpers for your return journey. High rollers can also helicopter over in 16 minutes.

WHERE TO STAY: Macau has a good selection of hotels. Two of the best are the 326-room Hyatt Regency Macau and the 435-room Mandarin Oriental. The Hyatt (2 Estrada Almirante Marques Esparteiro, Taipa Island, 1-800-233-1234, www.macau.hyatt.com) has full resort facilities, a casino and nice views of the city. Special winter rates are $75 for standard rooms, $95 for harbor view.

The Mandarin Oriental (956-1110 Avenida da Amizade, Outer Harbor, 1-800-526-6566, www.mandarin-oriental.com) is conveniently located within walking distance to the Arrivals Pier.Winter room rates run from $116 to $155.

WHAT TO DO: Aside from gambling, sightseeing and dining, Macau offers both horse racing and greyhound racing (at its logically named Canidrome) as well as an opportunity to see jai alai at the Jai-Alai Palace. Best buys include gold jewelry, tailored clothing, wines and Cuban cigars.

INFORMATION: Macau Government Tourist Office, 1-310-670-2234, http://macau.tourism.gov.mo

--Steven Knipp