Huatulco Mexico. Santa María Huatulco is a town in the southern Mexican state of Oaxaca. Sandy white beaches and crystal-clear waters, hidden in beautiful bays and coves make this a really special place. Originally a small fishing village, Huatulco has developed from the surrounding jungle and now offers visitors an area of great natural beauty with a number of archaeological sites, extreme white water rafting trips, local traditions, and charming friendly locals.