Hozenji Yokocho is a historic Edo-era alley located in the South of the famous Dotombori, right behind the Hozenji temple. The name "Hozenji Yokocho" literally means the alley next to the Hozenji temple.
So before venturing in the alley, you should definitely visit the famous temple the alley derives its name from. At night, the stone-paved pathway and the lanterns adorning the small temple create a very magical atmosphere. You'll feel like you've been thrown back 200 years in the past.
There is also this famous Buddhist statue on the temple's premises. The statue was the only thing that withstood war-time bombings. According to a famous story, an elderly woman made a wish by throwing water on the statue and her wish did come true. From that time, people have been making wishes by throwing water on it, thus resulting in the statue being permanently covered with moss. Ironically, the statue is meant to be scary so that people would be scared into enlightenment, but the green mossy coverage makes it look quite soft and gentle.
Once you step through the yokocho's gate, you'll discover about 60 taverns and restaurants along the 80 meters long and 2.7 meters wide alley. Contrary to many other yokocho alleys which serve cheap food in shabby-looking, a bit rowdy but friendly establishments, Hozenji Yokocho's establishments are more on the sophisticated side. You can find many excellent restaurants serving Osaka's specialties.
You can have delicious Japanese sake served the traditional way.
Okonomiyaki (thick savory pancake) on an iron plate served at one of the alley's restaurant. Places serving teppanyaki (iron plate grilling) dishes are quite popular in Osaka.
Kushiage (deep fried vegetable or meat skewer). You dip the whole skewer in a soy-based sauce. Difficult to find a better accompaniment to a nice cold beer!
You can also find some unusual things such as this duck nabe (Japanese hot pot).
One restaurant worth mentioning in Hozenji Yokocho is Matsusakagyu Yakiniku M. It is very well regarded and has won many awards including a certificate of excellence from tripadvisor. You should try there their specialty, one of Japan's most famous beef: the Matsuzaka gyu.
Hozenji Yokocho is one of the best places in Osaka to get submerged in a samurai era-like atmosphere. You should probably go there twice, Once during the day and once at night.
At night, the lanterns are lit up and the alley is even more exquisite. Dining at one of the yokocho's restaurant is well worth it too!