Top 9 Small Towns in Iceland You Shouldn’t Miss

Small Towns in Iceland

blog authorBy Johanna Sigurðardóttir shield verificationVerified Expert

    Regardless of if you want to explore nature or get some culture, you need to take time to visit the small towns of Iceland. In these towns, you can get close to mighty volcanoes, experience unique events, and even experience a month of constant daylight.

    Iceland is filled with amazing nature and impressive geological events. In all of this, it’s easy to forget the culture and all the breathtaking small towns in Iceland that can be found all over the island. Many offer so much more than they get credit for, and the rest are simply quiet and calm oases in this land of extreme happenings.

    What is Considered a Small Town in Iceland?

    As you may know, Iceland boasts a shy population of just over 350,000 people, which isn’t a lot compared to many other countries. This is something you will need to keep in mind while reading this article about small towns in Iceland.

    A small town is basically any town outside the Reykjavík area and Akureyri. There are roughly 65 towns and villages around Iceland, and for the sake of this article, we will count almost all of them as small towns in Iceland.

    • Vík í Mýrdal

    Topping our list is the seafront Iceland village of Vík í Mýrdal (or Vík for short). Sitting at the foot of the mighty Mýrdalsjökull Glacier, this is one of the most famous small towns in Iceland. It boasts an exclusive 300 permanent residents and is the warmest settlement in Iceland.

    Vík is next to the famous Reynifjara Black Beach and Reynisdrangar rocks. It’s also next to the most active volcano in Iceland – Katla, which comes with the occasional “volcano drill” that this Icelandic village has to do to prepare for a possible eruption.

    You can easily get to Vík via Ring Road 1, going east from Reykjavik. It is one of the first stops many do and is right on the way to Vatnajökull National Park.

    Small towns in Iceland

    • Höfn

    If you continue eastwards after Vatnajökull National Park, you will eventually reach one of the best towns in Iceland when it comes to lobster. Höfn is considered to be the best lobster place in Iceland and hosts a lobster festival every July to celebrate this. Definitely one of the small towns in Iceland to visit if you want to be at a huge lobster party.

    This is one of the Iceland villages that is almost completely surrounded by water and makes for amazing summer nights. In the vicinity, you can see the striking Vestrahorn Mountain, known for its dramatic peaks and impressive steep slopes. Nearby is also a not-so-well-known black sand beach that gives you a feeling of being in a fantasy world.

    Höfn is roughly 450 kilometres east of Reykjavik on Ring Road 1. One of many small towns in Iceland that becomes natural stops for adventurers. 

    Small villages in Iceland

    • Húsavík

    Jumping from south to north, we get to (probably) one of the most famous small towns in Iceland. Húsavik is known for two things: Whales and one particular song.

    First things first: Húsavik is at the top of the best towns to visit in Iceland if you are looking to see a whale. Dubbed the whale capital of Iceland, this town has had whale sightings on more than 95% of all whale tours for several years straight.

    Secondly: If you have seen the Oscar-nominated song from “Eurovision Song contest: The Story of Fire Saga”, you know what we are talking about. If not, you have some movie-watching to do. The name of the song is “Húsavik my Hometown” and is about as catchy as the open and friendly spirit of this town.

    Like many small towns in Iceland, Húsavik is a bit remote and will require you to travel 45 kilometres north when you turn off Ring Road 1. It is just east of the second-largest city in Iceland: Akureyri.

    Small towns in Iceland: Husavik

    • Seydisfjördur

    This is a hidden pearl among Iceland villages. A sleepy little town with a bright-blue church, hidden away in the fjord with the same name. Seydisfjordur is very easy to miss if you don’t pay attention, but it rewards visitors with grand views of the ocean, stunning snow-capped mountains, and breathtaking waterfalls. This is one of the small towns in Iceland that give the magic feeling of being in a fairy tale. All the colourful houses and beautiful scenery can easily convince you to you stay for a longer time.

    Even if Seydisfjordur is one of the small towns in Iceland, it doesn’t mean that there isn’t history to be had here. This used to be the base of allied U.S.-forces during WWII and is the only place that has actually been close to the war. A British oil tanker was bombarded by the Germans stationed in Norway, but luckily the captain decided to sink the ship himself and save his crew.

    If you are into the arts, Seydisfrjordur is a good choice among the small towns in Iceland. Here they have the annual LungA festival that brings all of the (almost) 700 inhabitants together in a week of festivities alongside the visitors.

    seyðisfjörður, Iceland

    • Grimsey

    There are remote small towns in Iceland and then there are remote small towns in Iceland. Grimsey Island is roughly 40km off the north coast of Iceland and has only around 100 inhabitants. All live in the harbour area, while the rest of the island remains mostly untouched.

    Just like many other Iceland villages by the sea, the big attraction here is the number of sea birds that come each year. If you are looking to go seabird spotting in any of the small towns in Iceland, Grimsey Island can provide you with roughly a million seabirds. Just remember that this Icelandic village is so far north that the sun literally doesn’t set in the summer, so bring your sleeping mask.

    Grimsey Island, Iceland

    • Selfoss

    This is not one of the small towns in Iceland that are easy to miss, nor do they have a particularly shy population. This 6,800-people town sits by the Olfusá river and is the centre of commerce, small industries, and agriculture in southern Iceland.

    Even though the name suggests otherwise, Selfoss isn’t particularly close to the waterfall with the same name. It’s almost on the complete opposite side of the country, actually. No one is really sure why this town was named Selfoss, but it’s just one of the small quirks of the small towns in Iceland.

    Ring Road 1 goes straight through this Icelandic small town and is not even an hour away from Reykjavik, so it’s a natural stop on your road trip around Iceland.

    Small towns in Iceland: Selfoss

    • Egilsstadir

    When going to the eastern part of Iceland, Egilsstadir is going to be one of the perfect small towns in Iceland where you can stock up on supplies and enjoy the surroundings. Egilsstadir is literally surrounded by waterfalls and is one of the areas in Iceland where you can get to see the reindeer roaming the highlands and mountainsides.

    You can take the long road upriver for some amazing nature and culinary adventures, or you can go downriver to Stapavik and marvel at the coastal scene. In the town, you can sit by the stream and listen to it calmly flowing through town.

    Egilsstadir small village in Iceland

    • Isafjordur

    The largest town in the Westfjords, but still a small town in Iceland. It boasts around 2,600 inhabitants and has the oldest standing house in the nation, dating back to the 1700s. Isafjordur is a town that is anything but sleepy, despite its size, with festivals going on year-round that attracts both domestic and international tourists.

    One of the most talked-about events in this town is the European Championship of Swamp Soccer. We suspect that the reason why it’s held here every year is that no one bothered to ask the rest of Europe if anyone else wants to host it.

    You find Isafjordur almost 350 kilometres away from Ring Road 1, making it one of the most remote towns in the country.

    Isafjordur, Iceland

    • Dalvik

    On the list of best towns to visit in Iceland, Dalvik is the place to go for an amazing skiing vacation in the winter. The surrounding slopes are built for beginners as well as experts, and there is even a wide and floodlit slope that is a whopping 1,200 meters long. In the summer, this is one of the small towns in Iceland that is perfect for a good hike, or a long walk along the black beach and observing the rich birdlife.

    You only need to go 35 minutes from Akureyri to reach Dalvik, making it a great option if you happen to be bunked up in Akureyri and in the mood for an adventure.

    Iceland villages

    Iceland villages full of charm

    Now that you know which small towns in Iceland to visit, all you need to do is pick the best car and get on the road!

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