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The newest AVA in Santa Barbara wine country is Santa Rita Hills, designated in 2001. Home to some of the most recognized vineyards in Santa Barbara, wines from this appellation were, until recently, and sometimes still are, labeled Santa Ynez Valley, as the area is located within the westernmost portion of the Santa Ynez Valley AVA. The general area is west of the town of Buellton and east of the town of Lompoc. The AVA is demarcated by the east/west transverse ranges of the Purisma Hills to the north and the Santa Rosa Hills to the south. Elevations range from sea level to 1800 feet above sea level.

The soils are based on large percentages of dune sand, marine deposits, recent alluvial deposits and river wash. This appellation is a true cool climate growing region due to the influence of maritime air and fog rolling in from the Pacific Ocean. The region's long, cool growing season makes for exceptional Pinot Noir and Chardonnay wine growing.