The hippies who frequented this place used to live in the man-made caves carved out the rock near the beach. These Roman and pre-Roman caves used to be a necropolis- a cemetery. Famous folk singer Joni Mitchell spent time there, and memorialized Matala in her song "Carey."
Matala was the place Zeus brought princess Europa after he took the form of a white bull and abducted her. Matala was the port of Phaistos. This quiet village makes most of its living from tourism, and has some nice beaches, including one (called Red Beach) for naturalists (i.e., nudists), so be careful if you bring your family.
Matala is home to the Matala Beach Festival, a sort of hippie reunion event taking place around June 20 every year since 2011. It recently attracted 60,000 visitors.
During the rest of the year Matala is pleasantly quiet, with a few bars offering a laid-back night scene. It has easy access to archeological sites such as Phaistos, Agia Triada, and Gourtyn.