The scenic part of town begins in Kyū-Karuizawa (旧軽井沢), about 1km north of the station. Work your way past the tourists jamming the pedestrianized, tacky shopping street dubbed “Little Ginza”, to emerge into a forest. Here you’ll find the quaint wooden Anglican Chapel, fronted by a bust of the Canadian missionary Alexander Croft Shaw, who helped popularize the area as a retreat. A short walk southeast is the historic Mampei Hotel, which has a small museum of its memorabilia.
Heading northwest along the main road, Mikasa-dōri, it’s a pleasant 2km cycle ride or hike up to the secluded Old Mikasa Hotel (旧三笠ホテル), an elegant wooden building dating from 1906 that’s now a national monument. Follow the road north from here, past the camping ground, to Kose (小瀬) where a 10km hike to the scenic Shiraito Falls (白糸の滝) starts, and onwards west to Mine-no-chaya (峰の茶屋) from where you can take a bus back to Karuizawa Station.
A 6km pedal west of Karuizawa is Naka-Karuizawa (中軽井沢), another beautiful area for cycling, hiking and relaxing. The main focus is the Hoshino area where you’ll find the luxury resort hotel Hoshinoya, an excellent onsen, Tonbo-no-yu (トンボの湯), a forest of chestnut and larch trees where you can take guided nature tours and a stylish, low-key shopping and dining complex, Harunire Terrace. If you don’t feel like cycling, a free bus runs here from the south side of Karuizawa Station; enquire at the tourist information office about the schedule.