Caunus is situated on the western bank of Dalyan River (Calbis) which connects Lake Köyceğiz to Mediterranean Sea. More precisely, it is opposite the present town of Dalyan, within the boundaries of Çandır village in Köyceğiz District.
The city was once a harbor city; today it is far from coast line due to the silting of the delta and the ports.  On the north and west, the ancient city is surrounded by Mountain Balıklar and Mountain Kızıltepe which are extensions of Mountain Ölemez.

Geomorphological and topographical changes to the environment prior and following to the foundation of the city distinguishes it from any other contemporary cities, not only in regard to ancient geography and town planning, but also in respect to its political and social life, the economic and cultural changes and achievements of the city.

Dalaman plain with an area of 100 km2 at the east of the region, is irrigated with water from Dalaman Stream which is mainly rises from Horzum stream that drains the Mountain Güntutan. It was understood that Dalaman stream was flowing into the sea from the Gulf of Dalyan. It has filled a significant portion of bowl-shaped Köyceğiz with the alluvium brought.
Despite the fact that Caunians claimed for themselves a Cretan origin, according to Herodotus they were indigenous of Anatolia. Herodotus also tells us that they were quite distinct from their neighbors with their own beliefs. Basileus Kaunios was the god-king of Caunus. This god-kings’ name was mentioned on the inscriptions found in the excavations of ancient city of Caunus and also appears on the tri-lingual stele (Lycian, Greek, Aramaic) which was found in Letoon in 1973 and on display of Fethiye Museum. The importance of this stele for Caunus which was erected during Piksodaros’ satrapy is; at that time Piksodaros who was the little brother of Maussollos conquered Xanthos and decided to build an altar for Basileus Kaunios and force the people to worship him. Such a tradition, after conquering a place to force people worshipping a foreign god is a tradition of Anatolia and Syria. These descriptions tells us that the founders of the city of Caunus distinguishes from its neighbors with their languages??, customs and traditions and also by the gods of their own, and they appear to be another indigenous people of Anatolia.
The difference in its local name is another proof of the fact that the founders of Caunus were the indigenous people of Anatolia. We first learned that the local name of ancient city Caunus was Kbid from the tri-lingual stele of Letoon.  In Greek inscriptions the name of the city is mentioned as Caunus whereas in Carian inscriptions it is Kbid. According to our latest knowledge Caunians used their city’s original name at least at the end of the 4th century BC.  How come the city started being named as Caunus in Herodotus period? It is complicated. Due to recent researches the idea that gain importance is Caunus was a Greek name. This idea can be explained as; in order to change the name, the city to be colonized by the Hellenes and soon after like what happened at the other Anatolian cities to show themselves' as the founder of the city, they should deliberately invented the story to be carried out before the era of Herodotus. According to this story, starting to be told for the first time at the end of the Classical Period; Caunus who is the legendary king and son of Miletos has a sister called Byblis who is in love with him. Caunus did not accept his love, rejected her and she hanged herself.
The British Scholar Rd. Hoskyn was first to discover ancient city of Caunus. During Hoskyns’ visit on 1840, he found a law tablet, referring to the Council of Caunos and the inhabitants of this city, so he realized this place is the ancient city of Caunus. During the course of the ensuing century, two important visits were made to the city, by the French Scholar M. Collignon in 1876 and by the Italian Scholar A. Maiuri in 1920. The first detailed scientific information about the city was provided by another British Scholar G. E. Bean from 1954. The first archaeological excavation of the site was undertaken by a Turkish team in 1966 under the leadership of Baki Öğün, and excavations continue to the present day and are now supervised by Prof. Cengiz Işık.

First ruins to take attention when reached to the ancient city are the king tombs carved on rocks. The rock-cut tombs which carved upon the steep limestone facade of Balıklar Mountain that surrounds the bay from northern direction are grouped in seven different areas at various elevations to the southwest facing the bay. Of the rock-cut tombs at a total of 167, none of which can be dated to before the 2nd quarter of the 4th century BC., the most important group are those with the facade of a temple. Today they became a symbol of Caunus. In tombs carved into hard rocks with great difficulty, one or more graves, and altars exist. King's tomb includes more than one burial place and it is thought that besides the king, his family also buried in the same tomb.   
 Another significant place in the city is the upper Acropolis. At the summit of acropolis which has a completely steep southern slope, there is a medieval fortification supported by towers.

This project is co-financed by the European Union and the Republic of Turkey