A good map is available here.
The following article describes the route from north to south in four sections, divided by the three biggest settlements
The Carretera Austral (CH-7), formerly known as Carretera General Augusto Pinochet, is the name given to Chile's Route 7. It runs for 1240 km from Puerto Montt in the north to Villa O'Higgins in the south. Some call it the road after the end of the road, because it is not officially part of the Panamerican Highway that ends on the island of Chiloe Island. Construction of the road started in the 1970s and is still going on. It passes through very beautiful and sparsely populated parts of Chile. Landscapes vary from forests and fjords to spectacular mountains, glaciers and volcanoes.
The road conditions range from very bad to normal paved road (around Chaitén and Coyhaique). Parts of the road are gravel (ripio in Spanish) ranging from quite good quality to absolutely horrible. If you are driving, you will not need a 4WD but your car will be suffering. You will probably have to take a ferry or two to get in or travel along the road.
The local tourist information offices in the towns along the road distribute good and free maps and information booklets.
Travelling on the Carretera Austral by bicycle is very popular in the summer months (best in December, January and February). You will need a good quality bike (mountain or touring bike), good panniers (although some people have been known to use milk crates and other less expensive alternatives), a spare tires and some tubes. It will also be helpful to have duct tape, zipties, elastic straps. While the selection in Puerto Montt is very limited, Santiago has a lot of bike shops (e.g. in San Diego street) offering European and North American brands like KTM, Trek, Felt at European prices. Add-ons like dynamos are hard to get and carrier racks range from robust to weak.
Many people, especially young Chileans, hitchhike on all or parts of the road in summertime. Hitchhiking is straightforward, but due to low traffic and fierce competition from other hitchhikers, it can be slow (but you should not be in a hurry anyway).
You can rent a car and drive it yourself. This is not possible if you are on a tight budget.
There is no scheduled bus that goes all the way from Puerto Montt to Villa O'Higgins. There are, however, scheduled buses running between different towns along the way, covering the whole length of the road. Between some towns there will be buses a few times a week, between others - once a week in high season. Prices are relatively high.
The only big cities with a full range of services are Puerto Montt and Coyhaique where there are big supermarkets, bicycle shops and bicycle repair shops. Anywhere else, you will be lucky to find a hardware shop (ferreteria).
To stay in touch, you can buy a local prepaid SIM card (you will need an unlocked phone for that). Cell phone coverage is usually present in towns and villages. Entel has the best coverage. Movistar is the second best company, but south of Coyhaique, they only have coverage in Cochrane. Virgin Mobile has good deals on prepaid SIM cards and uses Movistar's network. WOM has cheap plans but switched roaming from Entel to Claro by the end of 2015. A good comparison can be found here. If there is a public library in town, there will be free Wi-Fi.
Chile is a relatively expensive country and the extreme south is even more so. If you are on a budget, or you are travelling by bicycle or hitchhiking, needless to say, you have to bring a good tent. It is always a good idea to carry food for at least two or three days. In most towns there will be at least one minimarket, selling bread and some other basic things. If you are lucky they might have some good vegetables and fruits. Siestas are the norm.
Having a very strict schedule is not a good idea. The locals say that those who are in a hurry don't go far.
Good gear for bad weather, especially rain and wind is essential. There is a mall in Puerto Montt and some shops in Coyhaique, but again you will find better deals in Santiago (Andesgear, Mall Sport, Costanera Center).
If you are entering from the south, bring enough Chilean pesos. The only ATMs are in Coyhaique and Cochrane. Credit cards are almost never accepted. Check the official and the "Blue Dollar" exchange rate when crossing to Argentina. It might be a good deal to bring enough CLP rather than using an Argentinian ATM, but safe some CLP for the way back to Chile. In Coyhaique, at Frutteria Palestina, you can buy Argentinean pesos at a better rate than in Argentina (as of 2015, still not as good as in Puerto Montt or Puerto Natales).
Transporting your bicycle to and from the Carretera Austral can be very easy or very difficult. Taking a bicycle on a bus in Chile is generally OK. The driver might say there is not much space but you should politely insist, maybe remove the front wheel to show how small it actually is. You might have to pay a bit extra to the driver (normally around 2000 CLP). Many bikers start or end the journey in places in Argentina - Ushuaia or El Calafate for example. Buses in Argentina are ridiculously expensive and might charge you as much as 400 Argentinean pesos to take your bike on the bus to Buenos Aires, for example. You can ship your bike (Via Cargo seems to be a good company) for less than that and make your way alone (hitchhiking is straightforward, except for on Ruta 40, going north, it seems). Some bikers have reported problems with customs when shipping their bike from Ushuaia, as the cargo passes the border twice. Finally, LADE flies more cheaply from El Calafate and Ushuaia than others to/from Bariloche, Buenos Aires, Comodoro Rivadavia and other destinations. Visit their office (open 10 to 16 on weekdays) or call for inquiries. Their website shows availability even when there isn't any. Their rates are fixed (around 900 pesos to Buenos Aires). Book in advance because they sell out. They charge only 8 pesos per kg of luggage above the included 15 kg, so taking a bike with you will not be to expensive. From Punta Arenas, buses going all the way to Santiago de Chile, passing through Argentina, seem to be a lot cheaper per km than their Argentinean counterparts.
Considering the magnificent landscapes around, this part of Chile offers few hiking possibilities. Apart from a few short trails in the national parks (Pumalín, Queulat, a trail in Caleta Tortel, some trails around Cochrane and Villa O'Higgins), there are no other hiking possibilities, and noticeably - no long distance trails. In fact, most of the time, there will be a fence between you (the road) and the surrounding nature, as most of the land is private.
If you start from the north, getting to Puerto Montt is straightforward.
There are a few border crossings from Argentina to different places on the Carretera Austral (see map).
To start from the south at Villa O'Higgins, you will have to do an interesting and expensive border crossing from El Chaltén in Argentina. From El Chaltén there is a road of around 40 km of very bad ripio to the southern shore of Lago del Desierto (hitchhiking not impossible in high season). You can camp here, but it is better to go to its norther shore the same day and camp there (much better location and view and it is free). Take the boat (130 ARS, March 2013 - two, three times a day in high season, passengers and bicycles only, no cars). Alternatively, hike along the lake (5 hours), kind of impossible with a bicycle. At the northern shore of the lake is the Argentinean immigration post. From there you will have to walk (and walk your bike if you have one) on a trail of varying quality and gradient) to the borderline between Chile and Argentina. From the borderline, a very bad gravel road (on the Chilean side) leads to the southern shore of Lago O'Higgins (camping possible here). From here you will have to take a very expensive ferry (passengers and bikes only), 40000 CLP as of March 2013, no extra fee for a bike. The ferry goes once a week in shoulder season and up to four times a week in high season. Cancellations are possible. They accept credit cards (at least in their office in Villa O'Higgins). The ferry takes you to the harbour, 7 km south of Villa O'Higgins, which is officially the southern end of Carretera Austral. If you are doing this crossing in the opposite direction, you can secure a place on the boat by buying the ticket in their office in Villa O'Higgins, but you can also just show up. The crossing generally takes two days, camping at Lago del Desierto, at the Argentinean immigration post, with a magnificent view of the lake and Mount Fitz Roy is highly recommended.
You can fly to Coyhaique (the airport is in Balmaceda, 1 hour south from Coyhaique) and to Puerto Montt on regular flights. There is a small, inexpensive, private plane between O'Higgins and Coyhaique (2015 Mondays and Thursdays). Ask at the hostel El Mosco for more information.
Remember that every time you cross the border between Argentina and Chile, all fruit, vegetables, lentils, beans, cheese, meat, honey etc. will be confiscated.
Section 1: Puerto Montt to Chaitén
The road from Puerto Montt to La Arena is paved the entire way. From La Arena you will have to do a short ferry ride to continue. It departs every hour or so during daylight hours. 700 CLP per pedestrian, 2800 CLP for a cyclist + bicycle, try to find a camioneta to take your bicycle across and save money this way. There is no campsite in La Arena, but you can wild camp on the beach. There are a few places with tasty and cheap empanadas in the village. If you are coming from Puerto Varas and the lake district, you can also take the road through Cochamo and skip this ferry, though the road is hilly and unpaved all the way from Ralún to Caleta Puelche, with a small exception around Puelo. There are nice campsites at Cochamo and Puelo.
The road to Hornopirén (close to Rio Negro on the map above) is under construction. As of May 5th, 2015 it's paved until the bridge "Puente Puñon" which is just before kilometer 60. From km 60 to km 70 it is 99% ripio. From km 70 to approx km 74 it is paved, 74-85 is ripio, 85 to approx 3-5km from Hornopiren is paved, and as of May 5, 2014 they were currently working on paving the last bit into town. In Hornopiren you can camp at a campsite for about 3000 CLP or ask a local to camp in their backyard for as low as 1500 CLP (hot shower included). Hornopiren has supermarkets amd free wifi at the library. From Hornopirén you will have to take the ferry (once or twice daily in high season) to Caleta Gonzalo. It is in fact a combination of ferry + 10 km road + ferry. The whole thing costs 5000 CLP per person (with or without bicycle. Same price whether you go to Caleta Gonzalo or Chaiten. Apr 16), more for cars. Extra passengers in cars (besides the driver) still pay 5000 CLP so it is not possible to hitchhike and get a free ride this way. Drivers will drive the 10 km stretch of road, walking passengers will be taken across by a minivan in order to make the connection to the other ferry that will take you to Caleta Gonzalo. If you are biking, it is best to cycle it (around 40 minutes). Even if you are told that the minivan will take your bicycle across, the minivan driver will not think so. It is a good idea to buy your ticket in advance, once you arrive in Hornopirén, especially if you have a car or bicycle. There is always space for bicycles on the ferries but they restrict the number of bicycles to four on each passage, because of the abovementioned transfer. If there are already four bikes booked on the departure you are interested in, you will be told to find a camioneta that is willing to take your bike across and come back to buy the ticket as a walking passenger. Even if you don't find a camioneta, come back in five minutes and say you did. Then just take your bike on the ferry and bike the 10 km road.
At Caleta Gonzalo you are entering the private park Pumalín. There is a nice and cozy information centre at Caleta Gonzalo. Hitchhikers might have a tough time getting a ride from Caleta Gonzalo if many hitchhikers arrived on the ferry. Besides, the next car to come will be on the next ferry (next day?). If you are lucky you can get a ride with some park rangers. It is best to talk to drivers on the ferry to secure a ride further. Given the bus/ferry costs the same to Caleta Gonzalo or Chaiten you might also go to Chaiten and hitchhike from there. Chaiten has supermarkets, shops, cafes and hostels. Most beds/rooms in Chaiten cost 10.000 or 12.000. The Hostel and Camping Las Nalcas (corner of C.Ercilla and Libertad) has rooms for 10.000 and sheltered camping for 5.000 (in a kind of garage. You can use the facilities: shower, kitchen, house, wifi etc. Price as of Apr 16)
Parque Pumalín has a few hiking trails (including one to the crater of volcano Chaitén). There are a few campsites with varying facilities and cold showers. These belong to the national park (2500 CLP per night). You are not allowed to wild camp in national parks in Chile. Some of the smaller campsites are not manned and rangers come around 9 am to collect the fee. The road through the park is generally in a bad condition. You can visit the park either from the north (Caleta Gonzalo) or south (El Amarillo). From El Amarillo you can hike to a few campings and a nice glacier (from the entrance it is ~2km to the first camping, 10km to the last camping and 20km to the foot of the glacier, although you can see it nicely doing a short walk from the last camping)
Section 2: Chaitén to Coyhaique
From Chaitén the road is paved to Puerto Cárdenas. Midway is the small town of Amarillo with its famous hot springs. Between Cárdenas and Villa Santa Lucia there is a campsite (3000 CLP) at Ventisquero Yelcho. There is a hiking trail (3-4 hours) to the glacier and a waterfall.
At Villa Santa Lucia there's only one cabaña and one little hospidaje (7000 CLP). Many people do a side trip from Villa Santa Lucia to Futaleufu for the famous river or join/leave the carretera here. The road from the Argentine border to Futaleufu is paved but the road from there to Trevelin is not. South of Villa Santa Lucia the road is paved for the next ~30km while the last 40km before La Junta are not paved and include a few narrow one-way bridges. If you hitchhike, note that many cars will turn towards Futaleufu and a lot less will stay on the Carretera south of Villa Santa Lucia.
La Junta is a nice and lively town with friendly people. Hotels from 8,000 upwards to 45,000 at Espacio y Tiempo (very nice with great food too). You'll also find a Gas station and shops here.
Puyuhuapi is an interesting town with German influence, good for a rest day, nice location next to a lake. Hostel Evelyn on main road about 150 meters from Copec sign at the bridge costs 6,000 CLP per person including a hot shower, WiFi and a kitchen. Also a camping and shops in town.
Next, the road continues 60km (many roadworks as of November 2014) through Parque Nacional Queulat. You can camp at the hanging glacier (6000 CLP + 4000 CLP as a park entrance fee). Then there's the Queulat pass at 500 meters. It is crossed by a narrow gravel road with some very steep sections.
If you did not camp at the campsite and you need to find a spot to camp around the top of the pass, it is better to camp under a bridge (it is forbidden to wild camp in national parks). Alternatively you would need to continue until you leave the park, about 4km downhill after the Bosque Encantando, close to the intersection for Puerto Cisnes where it is flat and fires are tolerated (although not so great to camp. But there is a nice unofficial spot on the left if you walk ~400m down on the road to Puerto Cisnes. Enter the open gates and walk a bit more until the river). A few km after the top of the pass there is a nice hiking trail through the Enchanted forest (Bosque Encantado) to a very beautiful lagoon surrounded by peaks, waterfalls and a glacier. This walk costs 3.000 as of April 2016. If you camp close to the junction to Puerto Cisnes you would need to walk along the road for 5km uphill to reach the entrance.
After descending the pass to the Puerto Cisnes intersection, the pavement starts. A few km before Villa Amengual there is a very nice bakery in the middle of nowhere. Villa Amengual is an uninteresting town with mostly expensive accommodation and shops. The grocery store at the plaza had beds and hot water for 7000 CLP as of April 2014, but the owner changed in 2015 (still very friendly and helpful).
Villa Manihuales is a small town with many shops. It has a casa de ciclistas, where cyclists can stay for free. Unfortunately it is closed at the moment since the owner moved away from Manihuales.
In the last part of this section there is an intersection where you can go right to Puerto Aisen (and Coyhaique, ~70km) or continue straight to Coyhaique(~60km). The road straight to Coyhaique is not paved and in bad condition. There is only one campsite emerging in 2015 and limited wild camping opportunities.
The longer route is fully paved. About 7 km from the intersection to Puerto Aysen, there is a sign for a campsite on the right. Camping Las Torres Del Simpson, 6000 CLP, but worth the money with excellent facilities and including a thorough introduction to Mate tea and a tour of their small eco farming project.
Coyhaique is a 55.000 people town with usual services available. Note that accommodation is quite expensive.
Section 3: Coyhaique to Cochrane
After Coyhaique the pavement continues to Villa Cerro Castillo going over a pass that is the highest point on the Carretera Austral (1100 masl). For bikers, going north to south will be a very pleasant gradient and the downhill to Villa Cerro Castillo really good.
At Villa Cerro Castillo there is a good campsite down close to the river (4000 CLP). It is not the cheapest one but the extra 1000 CLP is worth it for the excellent service. Another nice hostel/camping is "Senderos Patagonia" towards the end of town (dorm bed 7.000 without sheets, 9.000 with; camping with use of facilities 3.000 as of Apr 16. Nice place with wifi, fire, kitchen, hot water etc). There are a few minimarkets, hospedajes and cafes in town. There is no gas station in town; there is a man in town who will sell gas out of a barrel behind his shop at a ~20% markup.
In Villa Cerro Castillo you can do a nice hike to a viewpoint over a blue laguna, glacier and the Cerro Castillo peak in the background. The "short" trail enables you to make it back in town the same day. It starts towards the end of town: at the sign "sendero de Chile, Cerro Castillo" follow the gravel road until a small wooden house (the rangers. Entrance 5.000p, usually only in high season) after a bridge. Just after the wooden house take right and then follow the numbered white/red wooden sticks until the top. Some parts are not well indicated, try to follow the deepest path (looks like the path was dug). The first part is very muddy/dusty depending on the weather. The second part is pretty steep. At a normal pace count on 4h up and 3h down. Light at the laguna is better in the morning. You can also book a horse tour in town that will take you ~half way and you'll hike the rest.
The road from Villa Cerro Castillo to Puerto Rio Tranquilo is very sparsely populated but offers plenty of wild camping spots along the river. Rio Tranquilo is a very touristy town. The excursion to the underwater caves is very good and not too expensive (5000-10000 CLP). Consider renting a kayak to discover it on your own.
The road from Puerto Rio Tranquilo to Puerto Bertrand has some amazing views of the lakes. There is a nice hike to Lago Leones where a glacier ends up in a lake. About 10-14 km of the total 24 km from the Carretera Austral intersection can be driven by car or cycled even though the road condition is very bad with sand and big gravel. The remaining 10 km hiking trail takes almost a day round-trip, can get wet and slippery and is very remote. There is a cave with a fire pit by the lake but hardly any camping opportunities (either private or full of bushes and rocks).
Many people join/leave the carretera in this part, go to Chile Chico and/or cross the border to Argentina. Note that until Chile Chico the road is not paved at all (some maps may say otherwise). Some parts are very difficult and some parts are smooth.
The last stretch of road to Cochrane is very scenic but up and downhills with bad gravel. The confluencia of the rivers Baker and Neff is very spectacular.
Cochrane has a good supermarket with a good selection of food and other goods.
Section 4: Cochrane to Villa O'Higgins
There are not many populated places on this road so bring food.
Caleta Tortel can be done as a side trip. It is an interesting town but very very touristy, commercial and expensive. Camping is possible at the beach (free) but can be very wet and windy. Accommodation gets full during the day and if you arrive late, you might have to sleep at the shelter at the parking lot. There is free internet in the library and in the municipal building. Cheapest dorm style bed goes for 7000 CLP.
From the intersection it is about 22 km to Puerto Yungay including a long climb and a pleasant downhill, not 30 km as signposted. The old lady running a cozy café at the harbor is very friendly and sells delicious empanadas, cookies and even fruits.
The ferry from Puerto Yungay to Rio Bravo is free and goes two or three times a day. It is advised to take the morning or the evening ferry and spend the night at the shelter on either side. They are both actual rooms, protected from the wind.
From here to Villa O'Higgins the gravel road includes three exhausting climbs, but is generally in a good condition and very pleasant.
At Villa O'Higgins there are some hiking trails. There is free internet in the library and free Wi-Fi all over town that sometimes even works. If you are taking the ferry to cross to Argentina (usually starts End of October), you can wild camp close to the harbor.
There is not much traffic on the Carretera Austral. The road conditions usually don't allow driving at too high speed. However, some people still drive quite fast (usually locals). Passing cars will create clouds of dust, which can be from annoying to dangerous if you are biking or hitchhiking. CONAF park rangers, driving green pickup trucks, are known to be some of the least considerate drivers around.
In high season, the weather is generally reliable and not too windy. When asked about the weather forecast, locals will usually say "Tomorrow will be the same as today", i.e. unpredictable. However it can pay off to use some good weather forecast websites such as YR and Windguru.
Medical services are far in between. Only Coyhaique and Puerto Montt have something like a hospital with some limited services in Cochrane and Chaitén.
Use a lot of sun protection. The southern sun is very, very strong.
Once you can ensure that there are no humans or animals above, most of the creeks provide drinkable water, especially the steep ones coming out of the mountains. You will normally find good water at least once a day. Plan ahead and trust your instincts.
With regard to crime, this part of the world is as safe as it can get.
If you are biking, take it easy on the gravel when going downhill. Big rocks, sandy patches, potholes, dead or living animals or just about anything can appear in the middle of the road at any time, giving you very little room for reaction. Also, wear a helmet at all times. Sometimes passing cars' tires send small stones across towards you.
Horseflies (tabanos) are super annoying and can be a bit dangerous if you are biking. They disappear at the end of January.
El Chalten and El Calafate in Argentina and on to Torres del Paine. See the Get In section for the border crossing procedure. Many bikers continue to Ushuaia, hoping that the strong winds in Patagonia (Argentina) and Tierra del Fuego will be in their back. Biking from El Chalten to El Calafate is doable in two days. At around 120 km from El Chalten there is an abandoned pink house next to the road where many bikers spend the night. The police is known to show up around 8 pm some days to throw people out. Try to arrive late at the pink house.
From many places on Carretera Austral you can cross to Argentina and travel on its famous Ruta 40 (known to be difficult for hitchhiking, very windy and sparsely populated). In fact, if you take a bus from Coyhaique to Puerto Montt, it will probably drive through Argentina.