Follow the asphalt road south of Vathi, which goes to the Matathia plateau. At a place called Anemodouri there is, on the right, a large blue and white sign pointing to the Arethousa Fountain track, directly on the other side of the road. Follow the red signs to the Homeric Arethousa Fountain. The scenery at the fountain is breath taking. 
Little metres before the fountain, the left track takes you to the sea, to the beautiful Pera Pigadi beach.