Best Towns & Cities in Iceland to Visit

September 5th, 2022

Written by:

Max Naylor

13 min read

The Land of Fire and Ice is best known for its spectacular nature, but towns and cities in Iceland also have a whole lot to offer. You could soak in the local pool with Icelanders, spend an afternoon museum hopping, or fuel up at a cozy café.

Travelers often ask about the best cities in Iceland, but technically there is only one place that earns that big city title: Reykjavík. Read on to get the lowdown on all the must-see and must-do experiences in the capital.

In this article, you’ll also find the best towns in Iceland to visit. Scattered around the countryside, they each have their own unique vibe and attractions. From sleepy fishing villages to artsy towns, Iceland has it all.

Top 10 cities & towns in Iceland to visit

1. Reykjavík

Hallgrímskirkja church at sunset with the statue of Leifur Eiríksson

The largest city in Iceland, Reykjavík, is also the country’s buzzing capital. Most people live here – in fact about two-thirds of the population call it home. Here you’ll find the center of Iceland’s cultural life, including:

  • Fascinating museums and galleries packed full of history
  • Diverse restaurants and food halls using Icelandic ingredients
  • Sublime local swimming pools, a great alternative to the Blue Lagoon
  • Buzzing bars with local beers and live music in the evenings
  • Cozy cafés, great for afternoon coffee and a slice of cake

There’s so much to see and do that we decided to break it down by neighborhood. So let’s dive in!

Downtown

Traditional Icelandic buildings in downtown Reykjavík

This is the oldest part of Reykjavík and is centered on the streets of Austurstræti, Bankastræti, and the main shopping street Laugavegur

The street is packed full of restaurants featuring cuisine from Iceland and around the world, along with trendy bars and cafés. It’s worth stopping by the food hall at Hlemmur for a cheap(er) and tasty bite.

Just off Laugavegur are the quaint streets of the Þingholt neighborhood. Here you’ll find classic Icelandic timber-framed houses painted in bright colors. And at the top of the hill, you can’t miss the iconic Hallgrímskirkja church, which was long the tallest building in Reykjavík. 

The local pool in this part of town is Sundhöllin on the street Barónsstígur. It’s the oldest in Reykjavík, opened in 1937, but was recently extended with a new outdoor area. Spend an evening relaxing in the ‘hot pots’ (what the locals call hot tubs) and getting to know the city’s residents.

You’ll spot countless museums and art galleries in downtown Reykjavík, including the Settlement Exhibition, Icelandic Phallological Museum, and Reykjavík Art Museum.

Grandi

The peninsula of Grandi near the old harbor is also known as the Fishpacking District. Historically where fisherman would dock their boats, today it’s home to trendy restaurants and cultural venues.

You can take a wander down the main street, Grandagarður, with its parade of cool eateries (including a legendary ice cream shop). There’s also a food hall with tasty options and great view over to Harpa and the harbor.

Fittingly you’ll also find the Icelandic Maritime Museum here, where you can learn about Iceland’s seafaring history and see the Óðinn coastguard ship. Further down Grandagarður is the Marshall building, home to Nýlistasafnið, a contemporary art museum.

The Þúfan sculpture on the Grandi peninsula, Reykjavík

At the very end of the peninsula is Þúfan, a permanent artwork inspired by the grass tussocks found all over the Icelandic countryside. You can walk to the top, where you’ll get a fantastic view of the city and the Esja mountain across the bay.

Vesturbær

The western part of the city is split into two parts either side of the Hringbraut road. On the north side, you’ll find more classic timber-framed houses with cute gardens. You might even spot one of Reykjavík’s many cats!

On the south side, you’ll find the Vesturbæjarlaug swimming pool. This has a massive outdoor hot pot and a relaxed vibe, perfect for chewing the fat at the end of a long day. 

There’s also a few cafés and restaurants scattered about the neighborhood, along with a legendary local ice cream shop.

The entrance to Þjóðminjasafnið, the National Museum of Iceland

This part of town is also home to the National Museum of Iceland, Þjóðminjasafnið. Here you can learn about Iceland’s history from the Viking settlement in the 8th century right up to the present day. It’s also a great place to pick up an authentic locally made souvenir.

Laugardalur

Geese at the Laugardalur park in east Reykjavík

You’ll find the Laugardalur valley just to the east of the city center. This leafy neighborhood is centered around a large park, which is home to Reykjavík’s zoo and botanic gardens. In the gardens you’ll find a wonderful greenhouse café filled with exotic plants.

On a sunny summer’s afternoon, you can enjoy a stroll through the park and end up at the Laugardalslaug pool. Here you can stew in hot pots, including one with seawater, or swim lengths in the Olympic-sized pool. It also has a slide, so along with the zoo, it’s great for kids!

Near Laugardalur is the ferry terminal that takes you over to the island of Viðey, which is packed with birdlife in the summer. It’s a great place to take a stroll and get a different view over the city. In the winter, the Imagine Peace Tower is lit every year on the island as a symbol of world peace.

2. Akureyri

The town of Akureyri is the capital of North Iceland and the largest settlement in the country outside of the capital area. You might be surprised to find that Akureyri is often warmer and less windy than Reykjavík thanks to its location in a sheltered fjord.

You can enjoy this pleasant weather at the botanical gardens, which include a collection of Arctic plants and a café in a forest.

The Akureyrarkirkja church at sunset

One building you won’t miss in the skyline is the church, Akureyrarkirkja, designed by famed Icelandic architect Guðjón Samúelsson (who also conceived Reykjavík’s Hallgrímskirkja). To get to it, you need to climb a ‘stairway to heaven’ from the town center, but it’s well worth it for the view.

Down in the town center itself, you’ll find restaurants and cafés clustered around the main street of Hafnarstræti. A short walk from here are the Hof culture house, which hosts various events throughout the year, and Akureyri Art Museum.

Even if you’ve never been to Iceland, you might well have come across the Einstök beer which is sold around the world. It’s brewed right here in Akureyri, and you can taste it for yourself at the Einstök Brewer’s Lounge in the town center.

Akureyri makes a great base for trips into the countryside of northern Iceland. It’s just over 1 hour’s drive from Lake Mývatn, with its unusual geological formations and hot springs.

3. Hveragerði & Selfoss

Well technically this is two towns, but they’re both in South Iceland and only a short drive from each other along the Ring Road.

Hveragerði is a charming small town filled with heated greenhouses growing flowers and vegetables. The town is in a very geothermally active area, which you will see if you stop by the town’s hot spring park.

A man bathing in the Reykjadalur valley’s naturally warm river

To the north side of the town is the walking route to the Reykjadalur valley. Here you can bathe in a naturally warm river, surrounded by Icelandic nature!

Selfoss is further south and is one of the larger settlements in Iceland. It’s home to an ‘old’ town center that features reconstructions of buildings formerly found all over Iceland. The centerpiece is the Mjólkurbú dairy building (below).

The Mjólkurbú food hall in Selfoss, South Iceland

These days you’ll find a food hall where you can grab a bite. And in the basement there’s an exhibit about skyr, Iceland’s famous yogurt-like dairy product.

As you drive between Hveragerði and Selfoss, you’ll almost certainly notice endless fields of horses on your way. This part of Iceland is ideal for horseback riding, so if you’re interested then get in touch with a local firm.

4. Stykkishólmur

The fishing village of Stykkishólmur is the largest settlement on the Snæfellsnes peninsula in West Iceland and a great place to stop if you’re exploring the area. In fact, Snæfellsjökull National Park – with its very own glacier – is just a short drive away.

View of the village of Stykkishólmur and its harbor

Clustered around the old harbor, you’ll find a handful of quaint restaurants offering top-quality local seafood. On the other side of the harbor is the Súgandisey cliff, where you can take in breathtaking views over the Breiðafjörður bay.

The bay itself is home to dozens of different bird species, including eider ducks. For hundreds of years, Icelanders have collected the duck’s feathers for use in pillows and duvets. At the Eider Center in Stykkishólmur, you can learn all about this traditional local industry.

You’ll find various boat tours operating from the harbor, including bird watching in the bay. There are also ferry connections to the island of Flatey, a popular escape for many Icelanders in the summer, and the Westfjords. Speaking of which…

5. Ísafjörður

A traditional street in Ísafjörður, the capital of Iceland’s Westfjords

By far the largest settlement in Iceland’s Westfjords, Ísafjörður seems like a metropolis in comparison to its neighboring villages. Nestled on a small peninsula in a dramatic fjord, this historic trading post is well worth checking out.

Its quaint streets are lined with traditional Icelandic timber-framed buildings, clad in corrugated steel and painted in bright colors. 

You can step into this history at the Museum of Everyday Life, where local voices and memories have been curated into a thought-provoking exhibition. The Westfjords Heritage Museum is another great place to visit to learn more about the region’s maritime history.

The town is also home to a surprisingly diverse range of restaurants, so it’s ideal for an evening meal after a long day of driving.

Ísafjörður is a hub for boat tours around the Westfjords. From here you can sail to the remote Hornstrandir region, now a haven for Arctic foxes after being abandoned in the 20th century. You could also join a whale or bird watching tour from the town’s harbor.

6. Borgarnes

The town of Borgarnes as seen from above

Although the town of Borgarnes was founded in the 19th century, it can trace its history all the way back to the settlement of Iceland in the 8th century. This arguably makes it one of the oldest towns in Iceland.

Skalla-Grímr, a Norwegian who was one of the first settlers, had his farm in the area. You can still visit it today at Borg á Mýrum just to the north of the town. It’s worth climbing the small hill behind the farm for the panoramic view across the fjord.

One fun fact: in the settlement period, the rule was that men could claim as much land as they could see from a high point in the land. So everything within view from the hill at Borg á Mýrum would have belonged to Skalla-Grímr!

Afterwards, drop by the Settlement Center museum in Borgarnes and learn the stories of more of the country’s earliest inhabitants. You can also stop for coffee and cake at one of the town’s cozy cafés.

7. Seyðisfjörður

The colorful small town of Seyðisfjörður in East Iceland is an unexpected haven for artists and musicians. Nestled in a small fjord, the town is worth visiting just for the stunning drive from the Ring Road around hairpin bends.

The blue church and rainbow path in Seyðisfjörður.

Seyðisfjörður has a remarkable collection of well preserved Icelandic architecture. You’ll notice the artistic influence in the town through the bright colors and murals painted on the buildings. Chief among them is the blue church, at the end of a street painted in rainbow colors.

In the summer, Seyðisfjörður is home to the LungA art festival, which attracts artists and art fans alike. You can take part in its program of exhibitions, concerts, workshops, and other events.

Some of the most interesting restaurants in East Iceland can be found in Seyðisfjörður, so it’s well worth an afternoon or evening detour. Get to the town via the 93 road, which connects up to Route 1. This makes it easy to add Seyðisfjörður to your Ring Road trip.

8. Húsavík

The fishing village of Húsavík has shot to fame in recent years as the setting for the film Eurovision Song Contest: The Story of Fire Saga. The filmmakers even created an ode to the village, which has become a karaoke favorite in Iceland.

The harbor in Húsavík in wintertime, with snowy mountains in the background

But Húsavík also has another, more exciting, claim to fame: it’s the whale watching capital of Iceland. The waters off its coast are rich with different species, including minke whales, fin whales, and pilot whales.

You can learn more about these incredible beasts at Húsavík Whale Museum, which is home to 11 whale skeletons. Visit the Maritime Exhibition at the Culture House afterwards if you want to explore the area’s seafaring history in even more depth.

Húsavík is one of the more remote villages in Iceland, yet it’s only a 1-hour drive from Akureyri. You’ll fall in love with its quaint timber church and seaside charm.

9. Vestmannaeyjabær

The town of Vestmannaeyjabær from above, with the volcano in the background

The town of Vestmannaeyjabær is the only settlement in the Westman Islands, a small group of islands off the south coast. The town, which is on the largest island of Heimaey, has a fascinating backstory.

Historically important due to their location near rich fishing grounds, the Westman Islands were ravaged by a volcanic eruption in 1973. Lava began spreading across Heimaey and made its way towards the town, which was partly swallowed up. 

Thanks to the heroic efforts of local fisherman, all the islanders made it safely away. You can learn all about the eruption and see an excavated house at the Eldheimar museum. Today the dormant volcano still looms in the distance.

Because of its compact layout, Vestmannaeyjabær feels different to many other towns in Iceland. As you sail on the ferry into the harbor, with puffins and other seabirds gliding above you, you might well feel like you’ve arrived in the Faroe Islands.

Elephant Rock and cliffs that are home to puffins on Heimaey, Westman Islands

It’s easy to spot puffins along the cliffs on the west side of town, near the golf course. Here you’ll also find Elephant Rock, a cliff named after its resemblance to the giant land mammal.

The Westman Islands are easily doable in a day, with ferry sailings multiple times a day from Landeyjahöfn harbor on the mainland. You can easily get to Landeyjahöfn from Route 1, just turn right near Seljalandsfoss waterfall.

10. Vík

Surrounded by black sand beaches, Vík is an obvious stop on any trip along Iceland’s south coast. It sits not far from the southernmost post on the Icelandic mainland.

Reynisfjara black sand beach is a stone’s throw from the town, in fact it’s just on the other side of the mountain to the west of the village. Read this guide to Reynisfjara for the lowdown on this legendary beach.

You can see the famous Reynisdrangar sea stacks from Vík, as well as from Reynisfjara itself. For the best view, head up to Víkurkirkja church. This viewpoint overlooks the whole town, including the beach.

Vík is home to restaurants, including one with a microbrewery. You’ll also find a knitting studio and another great local pool.

If you’re on a camping trip, there is a large campsite in Vík with good facilities. It’s also just across the road from the local supermarket.

How to see Iceland’s towns and cities

There are plenty of different ways to get between Iceland’s towns and villages. If you want the freedom to explore them all, a self-drive tour is the answer. You’ll be at the wheel in your own rental car, so you can go when you want, where you want.

A multi-day tour from Reykjavík will allow you to explore the towns of South Iceland, West Iceland, and the Snæfellsnes peninsula. And because you’ll be traveling by bus, you can skip the driving.

With a package from Iceland Tours, you get accommodation, local transport, and a detailed itinerary included. What’s more, you can lock in your booking with just a 5% deposit. 

So what’s stopping you? Get planning your Iceland urban adventure today!

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Written by:

Max Naylor