La Iguana Magica

If you are visiting Oaxaca, take a quick half-​day trip about an hour outside of the city to San Martin Tilcajete, a small town that specializes in making the hand carved and painted alebrijes. Learn more about them on wikipedia. No one is alike!
Joaquin at la iguana magica has in my opinion the best selection of them in this town. He and his family have been producing them for more than 30 years. If you buy in large quantity, be sure to ask him for a discount or a free figure. He will bargain hard, but you can usually get up to 15% off his list prices. It will be much cheaper for you to buy these here than in Oaxaca because you cut out the middleman.
Insiders tip: here’s how to get there and back most quickly. Go to the cathedral in the zocalo in oaxaca and proceed to the taxi stand. Agree on your one-​way fare in advance. It should cost anywhere from 100 to 200 pesos. If the taxi driver quotes you more, just go to another taxi driver in the lineup as we did. Upon returning from San Martin, just recognize you will have fewer taxi choices back to the city. You may have to pay more on the way back as a result.
If you are driving, I apologize in advance. I was the first to review this business, and for some reason Unilocal cannot find the right address. This little town is about one hour outside of Oaxaca, not an eight minute drive.