This was one of those trips we thought would be a nice enough outing, but it turned into a really fun day we'll definitely repeat. It's a great one to do with other friends and family.
Take the ferry from Portland to Peak's Island. You can bring your bikes on the ferry for an extra fee. You can also rent bikes on the island, but be sure to reserve in advance because they sell out during busy summer days. Side note: On a previous visit when my kids were very young we rented a golf cart to tour the island, and they loved it so much I thought they would explode with excitement.
There's a loop road around the island that's mostly flat and light on traffic. There are three public beaches on the island, all of which are worth a visit. If you pack a lunch (or buy food at one of the small local markets) you can enjoy a picnic with a view. The two big highlights of the trip for us were Cairn Beach and Battery Steele. Cairn Beach is loaded with millions of stones that are absolutely perfect for stacking. There are cairns all over the place, and once you start building you won't want to stop until you've found THE PERFECT ROCK. Battery Steele was a WWII gun battery. It's now the site of a long, dark, spooky tunnel that will absolutely creep you out, if you can even make it 1/3 of the way in.
Make sure you know the ferry times so you know when to be back at the terminal. I will admit to becoming unpleasant company when part of our group was behind and I thought we were going to miss the next ferry. But someone bought me ice cream and I was distracted until we were all reunited.
There are several small shops, markets, and restaurants on the island, although we didn't get to spend much time checking them out. There's also a place to rent kayaks right near the ferry terminal. Plenty to do for everyone!