Municipal workers will install about 22,000 signs and plaques on street corners in the city, home to 1.4 million people, where the current informal system is tolerated by residents, but creates headaches for visitors and the post office.
"My current home address is 200 meters north of the Pizza Hut then 400 meters west, but in a few months, I will be able to give a proper street name and a number," San Jose Mayor Johnny Araya said during a ceremony where the first street sign was placed.
Other popular landmarks residents use to describe how to get somewhere include the McDonald's restaurant chain, former President and Nobel Prize-winner Oscar Arias' house, a famous fig tree that has long since died and the site of an old cattle shed turned gas station.
Many streets will be named after illustrious political and intellectual figures from Costa Rican history.
Araya hopes the plan will reduce economic losses caused by undelivered, returned or re-sent mail, estimated at $720 million a year by the Inter-American Development Bank in 2008.
Almost one-quarter of the country's mail never reaches its destination, a spokesman for the Costa Rican post office said.
Postal codes were introduced in 2007 to help matters, but no one uses them because they do not know how to find them.
Costa Rica embarked on a street-naming crusade about 30 years ago, but the signposts were never installed. This time, funding from two different banks made the $1 million project possible.
Once the signage is up, Araya intends to undertake a campaign to encourage use of the new system, which is expected to encounter some resistance.
"I don't think it's going to work", 29-year-old taxi driver Manuel Perez said. "If a tourist tells me to take him to a hotel in whatever street, I'm going to say 'you're speaking to me in Chinese,' because I don't know where that is. I need a landmark."