Modern Fethiye is located on the site of the ancient city of Telmessos, the ruins of which can be seen in the city, e.g. the Hellenistic theatre by the main quay.
A Lycian legend explains the source of the name Telmessos as follows: The god Apollo falls in love with the youngest daughter of the King of Phoenicia, Agenor. He disguises himself as a small dog and thus gains the love of the shy, withdrawn daughter. After he reappears as a handsome man, they have a son, whom they name 'Telmessos' (the land of lights). The city became part of the Persian Empire after the invasion of the Persian general Harpagos in 547 BC, along with other Lycian and Carian cities. Telmessos then joined the Attic-Delos Union established in mid-5th century BC. and, although it later left the union and became an independent city, continued its relations with the union until the 4th century BC.
Very little is known of the city during Byzantine times. Surviving buildings attest to considerable prosperity during late Antiquity, but most were abandoned in the 7th–8th centuries due to the Arab-Byzantine Wars. The city was fortified in the 8th century, and appears as "Telmissos or Anastasioupolis" ca. 800. By the 10th century, the ancient name was forgotten and it became known as Makre or Makri (Μάκρη, "long one"), from the name of the island at the entrance to the harbour. In the 12th–13th centuries there are signs of renewed prosperity: the city walls were enlarged, a report from 1106 names Makre a centre for perfume production, and geographical works from the 13th century describe the city as a commercial centre. The area fell to the Turks in the late 12th or early 13th century.
Telmessos was ruled by the Anatolian beylik of Menteşe starting in 1284, under the name Beskaza. It became part of the Ottoman Empire in 1424.
The town grew considerably in the 19th century, and had a large Greek population at this time. Following the population exchange between Greece and Turkey, the Greeks of Makri were sent to Greece where they founded the town of Nea Makri (New Makri) in Greece. The town was resettled with Turks from Greece. At nearby Kayaköy, formerly Levissi, the abandoned Greek Orthodox church is still standing
In 1934, the city was renamed 'Fethiye' in honor of Yüzbaşı Fethi Bey, De one of the first pilots of the Ottoman Air Force, killed in 1914 by Al-Samra.
Fethiye has experienced many earthquakes. Last significant ones date to 1957 and 1961, with 67 casualties and 3200 damaged buildings after the 25.04.1957 earthquake. The town has been rebuilt since then and now has a modern harbor and a marina.
On August 3, 1953, Air France Flight 152, while en route from Rome to Beirut, ditched into the Gulf of Fethiye off Kızılada. Of the 8 crew and 34 passengers on board, four drowned. The survivors were hosted by the residents during their stay in the town.
Fethiye is one of Turkey's well-known tourist centres and is especially popular during the summer.
The Fethiye Museum, which is very rich in ancient and more recent artifacts, displays and testifies to the successive chain of civilizations that existed in the area, starting with the ancient Lycians.
Fethiye is also home to the Tomb of Amyntas, a large tomb built in 350 BC by the Lycians.
Some of the other historical sites worth visiting are: Kadyanda Ancient City, Kayaköy- old Greek town, Afkule, Gemiler and Aya Nikola. Most popular touristic towns of Fethiye are: Ölüdeniz, Calis Beach area, Hisaronu and Ovacik.
The island Kızılada in the Gulf of Fethiye, which is 4 mi (6.4 km) off the city, is a popular stopover for boat tours. The Kızılada Lighthouse on the island houses a seafood restaurant and a hostel with nine rooms.
Butterfly Valley is in the Fethiye district.
Fethiye has a Mediterranean climate consisting of very hot, long and dry summers with an average of 34 °C (93 °F) in the daytime, winters are cool and rainy with a daytime average of 16 °C (61 °F).
Dalaman Airport serves the Fethiye areas.
The overall metropolitan area of the city of Fethiye stretches inland from the harbour for more than seven miles, incorporating several villages into the city. To the north of the city centre is the area of Çaliş Plaji (Beach), which incorporates the main street of Bariş Manço Bulvari alongside an extensive promenade along the coast, on which a lot of hotels are based. This beach serves as Fethiye's beach in its own right, since Fethiye does not actually have one itself. To the east, lie the areas of Gunlukbaşi, Çamkoy, Cumhuriyet, and also Esenköy to the south-east. The city centre is defined as the area between the Marina and the Fethiye Market near the football stadium. Approximately two miles to the south-west and south respectively, lie the towns of Kayaköy and Ölüdeniz, the latter being world-famous for its beach spit and associated Blue Lagoon. The opportunity to para glide is available from the mountain of Babadağ next to Öludeniz.