Using U.S. dollars in Peru: where and when it’s accepted

In major tourist hubs — cities like Lima, Cusco, Arequipa and Puno — many hotels, travel agencies, upscale restaurants, and tour-operators accept USD.
In some large businesses (airlines, big bus companies, big department stores) USD may be accepted.
Currency exchange offices and banks will accept USD for conversion to the local currency (the Peruvian Sol, PEN) in many urban areas.

In smaller shops, local markets, street vendors, taxis, mototaxis or minibuses — especially outside major tourist areas — cash transactions almost always require Soles (PEN). USD may be refused or you’ll get a very unfavourable rate.
In more remote or rural areas: fewer businesses accept cards or foreign currency. Better to carry local cash.
Even where USD is accepted, it might be at a worse exchange rate (you may pay more) than if you transact in Soles.

If you arrive with USD, you can use it for big payments (hotel bill, tour, big-ticket items) in tourist-friendly places.
For everyday smaller purchases (street food, taxi, market goods) you’re better off using Soles.
When a vendor asks whether you want to pay in Soles or USD (commonly with card/foreign currency): choose Soles. Paying in USD may result in an unfavourable conversion.
If you do use USD: bring newer, crisp bills in good condition. Old, worn, torn or marked USD bills may be refused or accepted at a discount.

Carry a mix: Some USD as backup + enough Soles for local daily expenses.
For small purchases, change in Soles is easier (vendors will expect that).
Use banks, official casas de cambio (exchange offices) rather than street “money changers”. Street ones might give better rates, but are riskier.
When withdrawing cash from ATMs: Most ATMs in cities offer Soles, some may offer USD — but fees may be high.
Always check the exchange rate and ask in advance if paying in USD what the conversion will be.
For tipping: Although you can tip in USD, servers and smaller staff prefer Soles since they can use them immediately without converting.

Official currency of Peru: Peruvian Sol (PEN). USD is never the official legal tender.
USD can be accepted in many places (especially tourist ones) but not guaranteed everywhere.
Using Soles gives you the greatest flexibility and likely better value.