The island was named for the red castle that once dominated the main port. Kastellorizo Town's castle was last rebuilt by Juan Fernado Hereia Grand Master of the Knights of St. John. An ancient acropolis occupied the spot previously.
There are no beaches, but you can sun on the rocks like a contented seal, and the snorkelling is excellent. You can swim out to the tiny islets that Kastrellorizo broods over like a mother hen.
Kastellorizo Town is the only settlement. Near the waterfront it's spruced up with nice houses with red-tiled roofs. The back streets are less attractive. Knights of St John Castle stands above the quay. You can see all the way to Turkey from the castle grounds.
From the harbor a path leads to a Lycian tomb cut into the rock and sporting Doric columns. These type of tombs are most commonly found in Turkey across the strait. Other finds may be seen in the Museum (Tues-Sun, 7:30-2:30) including photos of the town before its devastation by earthquakes and the War.
Zigzagging white stone steps lead to Moni Agiou Georgiou in Kastellorizo Town. Outside of town, there's a monastery at Moni Agiou Stefanou, on the north coast.
An hour from town by boat is Parastas Cave or the Blue Grotto. This famous cave is known internationally for its wonderful rock formations. It is the largest sea cave in Greece and seals frolic in it. When the light is right, the entire cave turns blue. There are inexpensive boat trips to the grotto and surrounding islets, including Rho, where a nationalist heroine became famous for raising the Greek flag each day.
The waterfront is quite active with several taverns and most amenities.