The Yukon's capital and biggest town, Whitehorse was an important transportation hub when it was the terminus of the White Pass & Yukon Route Railroad to Skagway, Alaska, and the transshipment point for freight going down the Yukon River. (You can still ride on a portion of this railway as it chugs over the scary White Pass and past blue glaciers—a bus provides transportation to the rail line from Whitehorse.)
Several attractions in Whitehorse shouldn't be missed. The MacBride Museum has displays on Native American culture, an exhibit about wildlife, a firearms collection and a gallery of wonderful old photos (plan on spending several hours at the museum). The Yukon Transportation Museum has exhibits of boats, snowshoes, dogsleds and a full-size replica of the first commercial aircraft in the territory. The Old Log Church Museum is housed in a circa-1900 Anglican parish. This museum illustrates the role the Anglican missionaries played during fur-trapping and gold-mining days. The Yukon Beringia Interpretive Centre has an excellent ice-age exhibit—some of the artifacts were unearthed by miners searching for gold, including a startlingly well-preserved 26,000-year-old horse.
The Yukon Historical Museums Association offers an interesting walking tour of Whitehorse, but if the weather is too chilly for strolling, visit the Yukon Government Building, which tells the story of the territory in stained-glass windows and wall hangings. Yukon Gardens is a beautiful display of territorial trees, flowers and other plants. At night, take in the Frantic Follies, an 1890s vaudeville revue with comedy skits and dancing girls (definitely the best show in town). From June through August, the Canteen Show re-creates World War II USO shows as they were presented to the troops building the Alaska Highway.
Should time permit, consider a Yukon River tour aboard the MV Schwatka. If you'd rather experience 19th-century nautical nostalgia on land, visit the SS Klondike—the restored stern-wheeler is now a dry-docked museum. Other day-trip destinations include Takhini Hot Springs, 17 mi/27 km away, where you can soak in the natural heat of a spring-fed mineral bath, and Miles Canyon, which contains the Whitehorse Rapids dam and a fish ladder (late July-early August is the best time to see salmon migrating up the fish ladder).
Carcross, a 43 mi/70 km drive from Whitehorse en route to Skagway, Alaska, is a small, quaint town of log buildings, sand beaches and the world's smallest desert (the desert was created by retreating glaciers and consists of approximately 650 acres/260 hectares of cold, windswept sand). Carcross got its name from the tens of thousands of caribou that used to cross the lake around which the town is built.
There are a number of unusual annual events in the Whitehorse vicinity. The Yukon Sourdough Rendezvous (February) includes dogsled races, local arts and crafts, sourdough-pancake breakfasts, cancan girls, talent shows, leg wrestling, and a beard-growing contest. The three-day Frostbite Music Festival (February) hosts musicians from across Canada. The Annual Yukon Quest (February) is a 1,000-mi/1,600-km dogsled race from Whitehorse to Fairbanks, Alaska. The direction alternates every year, and spectators can view the action at Dawson (the only mandatory 36-hour layover point of the race), Carmacks or Whitehorse.
Other events in the area include the Yukon International Storytelling Festival (storytellers from around Canada and the world—June), and the Annual Yukon River Bathtub Race—the world's longest, toughest bathtub race. Running over two days in mid-August, it starts in Whitehorse and finishes 485 mi/780 km downriver in Dawson City. Then there's the late June-early July Yukon River Quest canoe and kayak race, which starts on Whitehorse's Main Street and finishes in Dawson City.