The restaurant at Chico Hot Springs [1] is known statewide for its gourmet fare (406/333-4933 or 800/468-9232, dinner nightly and Sunday brunch, dinner $23–36; reservations strongly recommended). Penny-pinchers can eat at the resort’s Poolside Grille (lunch and dinner daily, $3–14).
The other place to find really good food in the Paradise Valley [2] is the casual 
Pine Creek Café (2496 East River Rd., 406/222-3628, 9 a.m.–2 p.m. and 5:30–9 p.m. Mon.–Fri., 8 a.m.–2 p.m. and 5:30–9 p.m. Sat.–Sun. summer, closed Mon.–Tues. winter, $6–22). It’s worth the trip for the rainbow trout tacos or a buffalo sloppy joe; in good weather there’s deck seating.
Local color is enhanced by the horse-barn decor at the Livery Stable (406/333-4688, 5:30–9 p.m. nightly, $9–20) on the west side of the highway in Emigrant. The trout dinner is good; the steaks are variable.
Links:
[1] http://www.moon.com/destinations/montana/the-missouri-headwaters-and-south-central-montana/livingston-and-the-paradise-valley/paradis/chico-hot-spri
[2] http://www.moon.com/destinations/montana/the-missouri-headwaters-and-south-central-montana/livingston-and-the-paradise-valley/paradise-valley