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From Travel Information and Popular Attractions: TravelName.com

Matmata is a famous town 40 km south of Gabes, Tunisia. When you first approach Matmata you really do not find buildings and seems more like wilderness. Only after a closer look one realizes that there are actually underground caves called troglodyte. The concept of troglodyte is that its a big circular vertical pit in the ground with caves on the walls of that pit.

These caves are usually two storied with people living in the lower and bigger homes and the upper (2nd) floor usually has smaller rooms to store grains. The there are stairs so that one can climb to the upper floor. The reason for such architecture is because this area is extremely hot during day time and almost baking during summer and cold during winters, by living under ground provides a natural temperature control. Matmata is not the only place where troglodyte exist, they are also found in Morocco, Australia and many other places but nothing like Matmata. There are about 100 such dwellings with about 5000 people of Berbers community living here. This formation is possible because the sandstone of Matmata is soft and digging is possible, if you go inside these caves there are rooms inside. These dwellings can be hundreds of years old, people have been living in Matmata for about 700 years and a very few live on the above ground homes.

The first Star Wars movie was made here and it gave enormous popularity to Matmata. There are several buses which run from Gabes to Matmata. Although many others prefer taxi or personal 4x4 for convenience. Its best to do a night stay, most likely it will be Sidi Driss hotel. They try to give you authentic experience rather than making it fancy. Summer is very hot and you should avoid going during that time. It is advised that you respect the privacy of people living here and visit only the places like hotel and a museum created for tourism purpose.