Traditional Costumes
Women in traditional costumes in Ecuador with a man in more modern clothes
Traditional costumes in Cayambe
Farming women in traditional costumes in the highlands of Ecuador with a man in jeans
Busy market scene including Otavaleños in traditional highland costume
Otavalo woman in traditional costume.
Textile weaving showing traditional dress

Ecuador's traditional costumes are still found in some highland communities.  Regional dress in the coastal region has largely died out.  Tribes in the Ecuadorian Amazon wear very few clothes, their traditional costumes comprising mostly headdresses or jewellery.

Traditional Costumes of Ecuador

Traditional costumes are still much in evidence in some of Ecuador's ethnic groups and are a common sight in rural highland markets and even in the fields.  Other cultures, for example the "colorados" of Santo Domingo, have almost completely lost their traditional dress and the regional costume is seen only as a tourist attraction in staged events.  Ecuador is made up of around twenty ethnic groups, with very different cultures and traditions, so there is no one national costume for Ecuador.
The traditional dress of the Otavalo region is probably the most famous and most frequently seen of the traditional costumes in Ecuador and as such has a page to itself - see Otavalo Traditional Costume.  
Various other highland communities maintain many of their traditions, and distinctive hats, ponchos and embroidered blouses are normal daily wear for many Ecuadorian people.  Women from various villages in the Sierra (highlands) traditionally wear very full pleated skirts in bright colours, often with embroidery around the hem.  Different communities or ethnic groups often have their own subtle variation in the style of hat they wear.  A woollen shawl doubles as a means of carrying shopping or babies on the women's backs.
The Sierra region in general has maintained many aspects of traditional culture including the style of dress.  In Cayambe and Zuleta, easily visited from Quito or Ibarra, you will see local costumes in evidence at the market and in the fields.  Since traditional costumes for the men really only involve the style of hat and perhaps a poncho, jeans are much in evidence too, even in the most conservative villages.
Several of the rainforest tribes in the Ecuadorian Amazon still wear traditional feathered headdresses and other accessories with ethnic or tribal significance, though many younger members combine or replace these with western style clothing.  Some Amazonian tribes welcome visitors, others avoid contact.  Due to the extreme heat, most of the traditional costumes are more ornamental than warm!
The people of the costa, the part of Ecuador between the mountains and the sea, have perhaps lost most of their cultural traditions.  Their regional dress in most cases was not as distinctive or clearly defined as the ornate traditional costumes of the Sierra.  The black community in Esmeraldas on the north coast has its own distinctive culture, especially in terms of music, dance and cuisine, but costume is not a big part of this and there is no traditional clothing associated with them.
The Montubio people are noted for their sombreros (cowboy-style hats) and are often to be seen carrying machetes and wearing wellington boots, but do not really have traditional costumes as such.  "Montubio" is a vague definition but generally covers the provinces of Manabi, Los Ríos, Guayas, Santa Elena (only recently made a province, previously part of Guayas) and El Oro, extending slightly into the subtropical parts of Bolívar and Cotopaxi.  The Montubios have a strong regional accent and mostly work in agriculture.  They have now been formally recognised by the state.
Santo Domingo de los Colorados ("of the coloured ones") was named for the Tsáchila people, who used to wear their hair covered in red achiote paste.  (Achiote, or annato, is a natural colouring also used in lipstick and various foods, such as red cheddar).  Their traditional costume of a short wrap-around skirt is now virtually never seen.  The city of Santo Domingo was recently made the capital of a new province, Santo Domingo de los Tsáchila, thanks to its status as the fastest growing city in the country.  Sadly, its economic progress seems to have been at the cost of its cultural heritage.  You will have to go via a travel agent to some kind of tourist show to see traditional costumes in this area now.
The best way to get an overview of Ecuador's different ethnic groups and their regional dress is probably to see the traditional costumes at the Ethnographic Museum at the Mitad del Mundo.  The museum also showcases typical dwellings, musical instruments, etc. from ethnic groups in the Ecuadorian Amazon, sierra and costa regions, as well as their traditional costumes.  

Traditional Costumes of Ecuador
Ecuador's ethnic groups and their traditional dress  - design and symbolism of regional costumes and Ecuadorian traditional clothing,
from the highlands to the Ecuadorian Amazon.