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Surprisingly perhaps, given its naturist friendly reputation, nude bathing is illegal on all but a very few licensed beaches in Crete. It is however tolerated provided it is done with discretion on secluded beaches away from the general public and the local populace to whom it can be extremely offensive. For this reason established nudist beaches tend to be on the more deserted south coast, with virtually none on the heavily populated north coast. If you come across a quiet, sheltered spot, then it is pretty much up to your own discretion. Avoid beaches within sight of churches, of which there are quite a lot along the coast. As naturist beaches are by nature somewhat isolated, shade is often at a premium so you may want to consider taking beach umberellas etc.The popularity of beaches unsurprisingly varies according to the time of year and the day of the week. Sunday for example is a popular day for the locals to visit the beach, showing a preference for more isolated beaches away from mass tourism. There are several web sites dedicated to naturism and providing current status reports on Cretan beaches.
In the event that the police are called, it will usually result in a warning, though there is the possibility of arrest, three days in jail and a quite stiff fine. Topless sunbathing is legal, but again this can cause offence so please show some respect for the sensibilities of your hosts.
Below is a list of established naturist beaches, though they can be subject to change in the event they become popular with the general public. -

A beautiful spot between Loutro and Hora Sfakion. It can be accessed by taking a boat from Hora Sfakion, or walking from there. Take the road to Anopolis out of Hora Sfakion then pick up the E4 waymarked footpath on a bend. From Hora Sfakion walking should take about 1 hour, or half that if you drive to the footpath. The high cliff path may be a problem for vertigo sufferers. There is a cabin selling cold drinks and snacks here.

Walk 1 km. to the east of the castle, this is generally a fairly quiet and quite attractive spot.
Walk west along the beach and the location will become obvious. This spot does not offer much in the way of privacy.

Walk to the eastern end of the beach, and again the place should become obvious.

East of Plakias a small naturist only beach with sunbeds.

A naturist resort with officially licensed nudist beach close to Hora Sfakion.

Much more up to the minute and detailed information is available from