With its crater at 5023 m (16,480 ft) this active volcano provides strenuous hikes just south of Baños. You can hike up from the center of Baños (1800 m, 5900 ft) or take a taxi to the ranger station of Sangay National Park (2800 m, 9200 ft) and start from there. From the center go towards Termas el Salado. On the road that leads to the baths, take the first right to find the marked start of the trail. The first part of the unmarked but mostly obvious trail takes you up to the hamlet of Pondoa (2400 m, 7900 ft) which has a small restaurant. There follow the paved road that later turns into a dirt track up to the ranger station where you need to register (free). A steep and unmarked but obvious trail goes from there to the refugio at 3800 m (12,500 ft) where you could stay overnight ($5 per person) to enjoy the clearer views in the early morning. This hut has a basic kitchen, water access, and a few thin mats to sleep on. This is where you need to turn around unless you brought a guide. It is forbidden to go any further on your own because of the quickly changing weather conditions and the trail that is hard to follow in foggy conditions. Finally, there are bus tours (around $3) that drive up the mountain opposite the volcano. From there, you can see glowing lava if it isn't cloudy, and the volcano isn't producing too much smoke.
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Swing towards the mountains in the famous Casa del Arbol. Entrance costs $1. There are 2 swings with 2 more in construction. To get there, either hike (3 hr) or take a bus ($1 - 30 min). The bus generally comes back 1½ hr after it left you at the Casa del Arbol. In high season, the wait lines for the swings can grow quite big.
Head up to the statue of the Virgin Mary which overlooks the town for nice views, but be warned, it's a heart-pumping hike! Elevation gain is 250m, the trail is mostly stairs. It starts next to the public cemetery, there is a small shop selling snacks at the beginning of the trail.
The local zoo is quite large and features animals from various parts of Ecuador; monkeys, Andean bears, tayras (these may poop on visitors!), and jaguars, birds including condors, toucans and parrots, and Galapagos tortoises from but also snakes and tarantulas.
A park in the south of the city
Well-run set of cables with competent guides and good name-brand gear. The zipline trip goes once into a crevasse between two rocks at a mild incline, followed by a climb, a rope bridge, and a zipline back to nearly the start point. It's about 10 minutes out of town, and takes 15-20 min to complete the circuit.
The central park just west of downtown is lined by the city hall and tourist information.