The old city of Ghadames is small enough to explore entirely on foot — indeed, the interior passageways and rooftop walkways can only be navigated on foot. The covered alleyway system is a three-dimensional maze, and getting lost is part of the experience; the town is compact enough that you will always find your way back to the main square or mosque. Hiring a local guide is strongly recommended for a first visit: the alleyways are confusing, many houses look identical, and a guide can explain the social history and architecture that makes Ghadames so unusual.
The new town adjacent to the old city is where most residents now live, having been resettled there by the Gaddafi government in the 1980s. The old city is largely empty of permanent residents, though families return for festivals and some maintain their ancestral homes. Walking between the old and new town takes only a few minutes.
Bicycles can occasionally be hired for exploring the palm gardens and the desert fringe around the oasis. If you have your own vehicle, the surrounding desert and some of the old Saharan caravan track routes can be explored, but always with a local guide who knows the terrain. The Erg Ubari and other significant desert features are further south and require longer excursions.