South of Naracoorte is the pretty wine growing region of Coonawarra, near the town of Penola. There are approximately 20 wineries in the area, and the red wine is particularly good. Penola is a MacKillop pilgrimage site that has several interesting historic buildings within the town. You can see the pretty cottages on Petticoat lane, along with the Mary MacKillop Interpretive Centre and the Woods-MacKillop Schoolhouse, where you can find out about the history of the town and Mary MacKillop.
There is a selection of places you can stay in Penola, which is a great place from which to explore the Coonawarra region. These range from small cottages to hotels or camping.