Hyalite Canyon is the prime recreation area south of Bozeman. It's a great climb, never getting too steep. The end of the pavement is at the dam that creates Hyalite reservoir. Here you'll get a great view of the reservoir and surrounding mountains while you enjoy a snack before the descent. Bring a light jacket, it's usually 10-20 degrees colder at the reservoir than in town.
If you've got a 'cross bike or bigger tires you can continue past the dam on dirt/gravel roads for a few more miles. Then when you're ready to head down get ready for a fun downhill, especially the last few miles at the bottom of the canyon where the road is twisty. Watch for rocks and gravel, though.
Traffic is usually light and courteous, but since the lower canyon is on the edge of the creek and has minimal shoulders I would advise against riding in big groups, or when traffic is heaviest (weekends, holidays).
The route is easy. Follow the route for the Cottonwood-Gooch Hill ride but hang a left when you get to Hyalite Canyon. It's easy to find. Once you make that left, stay on Hyalite Road until you can't go any more. Walk or ride briskly past the slide, and continue on up. It's about nine miles from 19th to the reservoir. If you feel like it, continue past the dam on the dirt roads for a few more miles.