It is located 70 km south of Chania, on the southwest coast of Crete and occupies a small peninsula 400 m wide and 700 m long.

[1] Palaiochora's economy is based on tourism and agriculture (mainly the cultivation of tomatoes in greenhouses, and also olive oil production).

Ferry boats connect Palaiochora with Sougia, Agia Roumeli, Loutro, Chora Sfakion, and Gavdos.

The nearby village of Azogires, 5 km away, has a museum dedicated to the area as well as the now uninhabited Monastery of the 99 Holy Fathers and what is said to be the largest evergreen plane tree on the island.

This caused a major international incident since the Ottoman authorities accused the British of siding with the Cretan rebels.

During the Battle of Crete during World War II, the town was the scene of fighting between motorcycle-riding troops of the German 95th Reconnaissance Battalion and the Eighth Greek Regiment (Provisional) with elements of the Cretan Gendarmerie.

The general trend of urbanization that began in other parts of Greece in the 1960s had already started in the previous decade on the nearby island of Gavdos.