Arraial do Cabo is a coastal town in the state of Rio de Janeiro in southeastern Brazil. It’s known for white-sand beaches like Grande, Forno and Pontal do Atalaia. Offshore are shipwreck dive sites and the Gruta Azul (Blue Grotto) cave. On nearby Cabo Frio Island, the ruins of Cabo Frio Lighthouse date to 1836. To the north, the town of Cabo Frio is home to 17th-century, Portuguese-built Fort St. Matthew.