Situated in the Turkish district of Mugla, modern and vibrant Fethiye is located on the site of the ancient city of Telmessos, the ruins of which can still be seen in the city today.  The Hellenistic theatre, which was excavated between 1992-95 and originally had a capacity for 6,000 spectators on 28 rows is situated by the main quay.

As legend has it the god Apollo falls in love with the youngest daughter of the King of Phoenicia, Agenor. He disguises himself as a small dog and gains the love of the shy, withdrawn daughter. After he reappears as a handsome man, they have a son, who they name 'Telmessos' (the land of lights).

The city became part of the Persian Empire after the invasion of the Persians in 547 BC, along with other Lycian cities. Telmessos then joined the Attic-Delos Union established in the mid-5th century BC. and, although it later left the union and became an independent city, it continued its relations with the union until the 4th century BC.

Very little is known of the city during the Byzantine times., but surviving buildings attest to considerable prosperity, however, most were abandoned in the 7th–8th centuries due to the Arab-Byzantine Wars. The city is mentioned again in the 8th century when it was fortified 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. There are signs of renewed prosperity in the 12-13th centuries: the city walls were enlarged, a report from 1106 named 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/early 13th century and Telmessos was ruled by the Anatolian Beylik of Menteşe starting in 1284, under the name Beskaza, becoming part of the Ottoman Empire in 1424, and renamed Meğri until 1934.

The town grew considerably in the 19th century, and at the time had a large Greek population. Following the population exchange between Greece and Turkey in 1923, the Greeks of Makri were sent to Greece where they founded the town of Nea Makri (New Makri) and the town was resettled with Turks from Greece. 
In 1934, the city was renamed Fethiye in honour of Captain Fethi Bey, one of the first pilots of the Ottoman Air Force, who died during an airplane crash on 27 February 1914, while attempting to complete the first flight from Istanbul to Cairo. 

At nearby Kayaköy, formerly Levissi, the abandoned Greek Orthodox church is still standing, as are many of the original buildings in the area, and is worth a visit.