Iasos is built on a peninsula surrounded on its three sides by the sea in Kıyıkıslacık Koyu which is 28 km away from Milas. According to mythology, established by the colonists from Argos and received its name by Iasos, a commander of the colonists. There is no information regarding Iasos on the old sources until the 5th century BC. The location where it was established, was an island, its isthmus was formed by sand and rock deposits and became a peninsula. Important ancient structures such as large city walls, aqueducts, tombs and fish market which are located outside of the city walls. The earliest settlement belongs to the end of the 3rd century BC according to the excavations in the region that have been confirmed.
Once a upon time a musician was holding a concert in the theatre. During the concert, the chime of the bell had been heard to inform the people of the opening of the Fish Market, everyone got up to go to fish market, except the old man putting his hands on his ears. The musician came to the old man and said ' I owe you a huge thank for your respect to me and my art work, they have all left the concert as they heard the bell. The Old man shouted out; 'What?' Did the bell ring? He asked. Yes why? said the musician. 'Well, excuse me, sir' said the old man and he disappeared. Strabo tells this story to describe the Iasos are inclined to have fish because of the inadequate agriculture production from infertile lands.
Upon Alexander's siege of Miletus in 334, Iasos, he donated a Navy ship to the Persians trying to help the city. An Iasosian boy who had a strange destiny to be loved by a dolphin draws the attention to Alexander's interest.
After the boys have finished working at the gymnasium, washing themselves in the sea there is a tradition that a dolphin approaches the shore , picks up one of the boys and puts him on its back and then drops him back to the shore.
According to this narrative, when Alexander heard it, he brought the boy to be Babylon and made him god of the sea Poseidon's priest. Iasos have been so influenced by this story that they made a coin in their money depicting the figure of this story in the 3rd century BC. There are regular excavations being held by the Italian Archeology Committee since 1960. Many ruins of Iasos ancient city was revealed as the result of these excavations. One of them is Agora by going through its arched door. It was built in Roman period and is surrounded by stoas. The structure of Bouleterion is in the south of Agora.