From page 25 of Oaxaca Tips
Casa Oaxaca "El Restaurante"  $$$-$$$$   (#23)
Constitución 104 (interior of Galería Quetzalli), Centro
Daily except Sunday: 1 - 11 PM.  Credit cards.
This is Oaxaca's premier restaurant. Food, service and setting are all superb. Executive chef Alejandro Ruíz uses fresh, local ingredients to create subtly-flavored, imaginative nouvelle Mexican/continental cuisine that not only sounds and looks enticing, but is a joy to eat. The menu changes seasonally, but the food is consistently inventive, well-prepared, and beautifully presented -- equivalent to a Michelin-star restaurant elsewhere.  The small, art-filled patio setting is appealing,  and  a comfortable bar fronting the street is an added delight. Prices here are no higher than at other top restaurants in the city, so for a splurge, a farewell dinner, or just to enjoy a really good meal, Casa Oaxaca is an excellent choice.
Reservations recommended.  Tel: 516-8889