The village and the beach by the lagoon was locally known as Belcekız or Belceğiz before the area became a magnet for mass tourism, although today many people in the area have no idea about what Belcekız is and the town as well as the lagoon are both known as Ölüdeniz, which literally means "dead sea" and originally referred only to the lagoon itself.
Inland to the north, 2 km to Ölüdeniz, are the former villages of Ovacık and Hisarönü, with occasional family-run guesthouses only a decade ago, but are today concrete sprawls of hotels and bars, agglomerated almost without a gap with the town of Ölüdeniz. Both serve as "bedroom communities" that offer accommodation that is close to but cheaper than Ölüdeniz proper.
Also Understand that during the peak season May-October Ölüdeniz is filled with British tourists, it is a popular vacation destination for British people and many British citizens own homes there, so you wont even feel like your in Turkey. To get more of an authentic turkish feeling Stay in Fethiye but even Fethiye has many many British citizens during peak season.
Ölüdeniz is connected to Fethiye with a wide road that is well-paved and is in a very good condition.
There is also a very frequent minibus (dolmuş) service between Fethiye and Ölüdeniz. In addition there are lots of taxi's (yellow) who now advertise their prices to each destination. The Dolmus are fine though and only cost 5 TL to get from A-B.
From Fethiye, the dolmuş leaves not from the otogar but infront of the nearby petrol station (you can see it from the otogar). It also makes various stops along the main road in Fethiye where there are designated bus shelters.