From page 41 of Oaxaca Tips
Mesón del Olivo $$$-$$$$  (#32)
Murguía 218, Centro
Open daily: 10AM - midnight.  Credit cards
Spanish cuisine is surprisingly rare in Oaxaca, making the Mesón a welcome presence. On the menu are a range of interesting tapas and appetizers, hearty Spanish soups, solomillos (steaks), chicken and duck… the list goes on, though mercifully the menu has been pared back compared to past years. Jovial owner/chef Javier Olivo (that really is his name!) clearly takes pleasure in his cooking and in your enjoyment of his fare, and he is more than happy to explain dishes. And while awaiting your food, you can entertain yourself reading the multitude of amusing Spanish sayings that decorate the walls. The Mesón is the closest you will get to Spain here in Oaxaca and a satisfying change from Mexican fare.  Tel: 516-1616

Sr. Olivo is a busy man. Upstairs he has opened a tapas and beer bar, and a new delicatessen next door features Spanish delicacies, many prepared in-house.