By Rail
Cuzco is connected to Machu Picchu and Puno by rail. Rail service was recently discontinued to Arequipa. This service is operated by PeruRail (http://www.orient-express...).
By bus
The Terminal Terrestre is about a 20 minute walk down the Av. Sol. You can also take a taxi for a few soles.
Buses are plentiful to and from other Peruvian and Bolivian cities like Lima about 24 hr, Puno 6-8 hr, 25 soles, Arequipa 10 hr, 20 soles, Nazca 14-16 hr, Copacabana 9-12hr, 60 soles and La Paz 12-15hr, 90 soles but are quite long and slow, although the views can compensate. The main roads are mostly quite good, but some can be bad, making trips take longer than expected.
Also, make sure your bus has a bathroom or that it stops for bathroom breaks every couple of hours before you buy tickets. There are Puno-Cuzco buses that have/do neither, and that can mean a VERY long 6-8 hours.
Expreso Los Chankas
Pje Cáceres 150. One of the only companies to offer direct service from Ayacucho to Cusco. 55 soles for a 22 hr ride on a semi-cama bus. Buses at 6:30AM and 7PM.
By plane
The airport is at the edge of the city taxi ride. There are daily internal flights to and from Lima, Arequipa and small jungle airstrips in the Amazon basin. Lan Peru has the most flights between Cuzco and Lima, followed by Star Peru, Peruvian Airlines and Taca. It is best to book the earlier flights to avoid weather delays and overbooking.
The closest major international airport is Lima. The cheapest one-way flights to Lima cost around US$110 2012, while a short notice flight on either LAN or Taca will cost around $300. StarPeru and Peruvian Airlines generally have the cheapest flights. Frequently, bad weather conditions can cause flights to be canceled, often up to two days on end. If you are flying straight into Cuzco, beware of altitude sickness for the first couple of days.
With only 5 gates and a few off the main terminal this airport is fairly small but because it sees thousands of tourists a day, it has a good amount of facilities. There are a few restaurants before and after security and some shops too. Massage facilities and communication services are also available. There are a few ATMs in the check-in Area. If you have time, look across the parking lot for last-minute shopping.
Airport taxes as of June 2011 have been included in all national tickets.
Note that the market rate for a taxi from the airport to the Plaza de Armas is around 10 soles, not 30 or more as the 'official' airport taxis may try to charge you. As a tourist, it's best to use the unofficial cabs outside and expect to pay around 10-15 soles without much trouble.