Orientation: Old Town, New City, and the Lake
Dali is really two places for a visitor. Dali Old Town is the compact, historic core that most travellers use as a base, while Xiaguan — also known as Dali New City — is the larger modern city to the south, where the railway station and airport connections are found. The Cangshan mountains run north–south beside the Old Town, with Erhai Lake on the opposite side, and the town slopes gently from the mountains down toward the lake. Locals often orient themselves by facing the mountains rather than by north and south, and printed city maps sometimes follow that same convention, so don't be surprised if a map doesn't put north at the top.
Getting Around the Old Town on Foot
Dali Old Town is small enough to cover entirely on foot, and its grid layout makes it easy to navigate. The main landmarks are the South Gate and North Gate, with Fuxing Road running between them, and Yangren Street (Westerner's Street) lined with cafés and tourist shops. Simple city maps are widely available cheaply, and guesthouses and cafés are good sources of advice on day trips around the wider prefecture.
Trains
High-speed trains connect Dali with Kunming, departing from both Kunming and Kunming South railway stations roughly every half hour and taking about two hours. There are also multiple daily high-speed services between Lijiang and Dali in both directions, again taking around two hours. Dali railway station itself is in Dali New City, not the Old Town, so you'll need a onward connection when you arrive.
From the station, local bus 8 runs to the Old Town from just outside, terminating near the North Gate. A separate route, signed for the Chongsheng Three Pagodas, also serves the Old Town and passes by the West Gate. The Dali Shuttle Bus is a more comfortable option that drops passengers a short walk from the Old Town's South Gate.
Buses and Other Public Transport
Public buses are the main way to move between Dali New City and the Old Town. From near the bus stations in Xiaguan you can pick up bus 12 and transfer to bus 8 or bus 4 for the run north to the Old Town; bus 4 also continues through the town itself. Fares are low and paid on board.
White minibuses also run between Xiaguan and the Old Town. They typically display a white sign in the front windshield reading 大理<->下关 in Chinese, and charge a flat per-person fare. If you're arriving by long-distance bus, note that services from Kunming West Bus Station generally terminate in Xiaguan, though some continue to Dali — check with the driver. Buses from Lijiang stop outside the Old Town, from where you can walk or take a taxi to the main guesthouses. There is also a long-distance service from Jinghong in Xishuangbanna, operated with sleeper buses.
Taxis and Ride-Hailing
Taxis are readily available, and e-taxis operate within Dali Old Town for short hops, though drivers often quote above the standard local rate, so expect to negotiate. For trips outside the Old Town, all prices are negotiable. A taxi between the Old Town and Dali New City costs roughly the same as the equivalent long-distance bus-plus-transfer combination, making it a reasonable choice if you have luggage. If you're heading to the airport, be aware that drivers may not always take you to the specific guesthouse or hotel you asked for, since some receive commission from particular hotels — booking an airport pickup through your accommodation is the more reliable option.
Bikes and Electric Vehicles
Bicycles can be rented from many guesthouses and rental huts around the Old Town, at daily rates that vary widely depending on quality, so it's worth shopping around. Chinese brands Merida and Giant are among the better options to look for.
Electric scooters and small electric micro-cars are also available for rent and don't appear to require a driving licence. E-scooter rates depend on battery range: cheaper ones are fine for riding around the vicinity of the Old Town, while paying more gets you enough battery to comfortably circle Erhai Lake. The small e-cars cost more again and have a longer range suitable for exploring further afield.
Getting from the Airport into the City
Dali Airport (DLU) sits east of Dali New City, about a 45-minute drive from the Old Town. There are no airport buses, so your options are taxis or a pre-arranged pickup. Taxis wait at the airport, but as noted above they can't always be trusted to take you to your chosen accommodation, so arranging an airport pickup through your hotel is the safer bet.
An alternative is to fly into Kunming Wujiaba International Airport, a major hub in Yunnan's capital, and continue from there — an airport shuttle bus operates between roughly 06:30 and 22:00. Flights to Dali from major Chinese cities such as Beijing, Shanghai and Guangzhou are generally available but typically involve a stopover in Kunming, and the best discounts tend to go to tickets booked well in advance.
Beyond the Old Town
Dali is a large prefecture with many destinations worth exploring, all relatively easily accessible from either the Old Town or Dali New City. The cafés in the Old Town are a good source of practical information on day trips around the prefecture.