Kayaköy, also known as Levissi to its former inhabitants, was a Greek village until 1923, when the Ottoman Empire ceased to exist. The governments of Greece and Turkey made a population exchange to become nation states ethnically based on the Treaty of Lausanne. According to the treaty, all Greek Orthodox inhabitants of Turkey were to be exiled to Greece, while all Muslim inhabitants of Greece were to be exiled into Turkey.
When the Greek inhabitants of Kayaköy left for Greece, Muslims from Greek Macedonia were settled in their place. But the Macedonians were used to large and fertile fields in their former land found this place to be hilly and rocky with little arable land. They felt it to be unfit to live in and therefor abandoned Kayaköy in favour of other regions. Decades of neglect in addition to the big earthquake of 1957 that shook the region hard has left Kayaköy what it is today.
Kayaköy had been populated enough to support their own newspaper and several schools and stores, but these days there is only a handful of natives left living there - mostly in the neighbourhoods of Keçiler and Kınalı, about 2 kilometers north and 2 kilometers west of the ghost town that Kayaköy has become.
Hikers can take the marked trail to Cold Water Bay (Turkish: Soğuksu Koyu), just south of Kayaköy. It is not immediately visible because of the hills Kayaköy is situated upon. Even though it is not much more than a cove with a short of stretch of pebble beach, it is the nearest access to the sea from Kayaköy. There is a restaurant with wild boar stew on the menu just behind the beach which may also make it worth a walk there. Two marked hiking trails head out from Kayaköy - aside from the one that descends to Cold Water Bay. One of them descends from the upper church towards the shore and Ölüdeniz, while the other trail leads inland to Ovacık, north of Ölüdeniz, the official trailhead of the Lycian Way.
About 8 kilometers southwest of Kayaköy is the beach at Gemile. It is accessible by a gravel road that is good enough for most cars from the neighbourhood of Kınalı, about 2 kilometers west of the ghost town. There is also a hiking path which somewhat shortcuts the gravel road. Just off shore at Gemile is St Nicholas Island with some ruins of a Byzantine chapel which dates back to 5th century.
An even more spectacular sight in the same direction is the monastery at Afkule which clings on high cliffs over the sea. It affords really impressive views over the Gulf of Fethiye as far away as Rhodes on a clear day. Other than its roof, this Greek Orthodox monastery is as sound as it was when abandoned in 1920s. To get there, you will need a short (about 3 km) but pretty demanding hike up and down along a trail, part of it, though, fortunately, through a pine forest. In total it takes around an hour on foot to get there from the ghost town.
Fethiye is the major city of the region, and in being so is the point of entry for travellers to Kayaköy. Fethiye has direct connections to many cities in the country including Marmaris, Bodrum, Antalya, Izmir, and Istanbul among others.