The 5 Loveliest Towns in Iceland (According to a Local)

There are plenty of towns and villages in Iceland, but which ones of them are worth visiting? In this article, I will tell you a thing or two about five of my favourite towns in Iceland.

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Nína Þorkelsdóttir

30. July 2021

When I meet people abroad and tell them I’m from Iceland, they often (correctly) assume I’m from the Reykjavik. In fact, most of Iceland’s population lives in the capital, which is the only place in the country that has enough inhabitants to be defined as a city.

So where does the rest of Icelanders live? Well, some live on farms while others inhabit villages and towns that are scattered around every region in the country except the Highlands. Throughout the years, I have been fortunate enough to visit most of them. Although it was a difficult task to discriminate between all the beautiful towns in the country, I finally managed to pick just five. Down at the bottom of this article, there is a map with the exact location of each town. 

1. Seyðisfjörður

The Rainbow Street in Seyðisfjörður. Unsplash/Dave Herring. 

Seyðisfjörður is a village of around 700 inhabitants, situated by a beautiful fjord in the Eastern Region of Iceland. Like many fjord towns, it is surrounded by mountains on both sides. Unsurprisingly, the town itself is very picturesque. Its buildings are quirky and colourful, and the newest addition to the town’s lively aesthetics is the Pride-inspired Rainbow Street. Against the backdrop of the moss-green mountains, the town looks like the site of a fairy tale.

However, what makes Seyðisfjörður distinct from similar towns in the region is its flourishing arts and culture scene. The LungA art festival takes place in the town every summer, attracting artistic youngsters from all over the country. The festival is usually packed with events, ranging from art performances and fashion shows to live concerts.

The art scene in Seyðisfjörður is also quite vibrant during the rest of the year. The Skaftfell art centre hosts a variety of exhibitions, workshops and educational events throughout the year. Artists can enjoy some peace and quiet by joining Skaftfell’s residency program, which has been ongoing since 2005.

Region: East Iceland

Population: 685.

Distance from Reykjavik: 661 kilometers (411 miles) - or roughly an 8 hour drive. There is a domestic airport in Egilsstaðir, a nearby town. The flight from Reykjavik takes less than an hour.

2. Ísafjörður

Ísafjörður in the darkness of winter. Unsplash/Aron Gestsson.

Ísafjörður is the largest town in the Westfjords of Iceland. However, it has the charm of a small town since it is inhabited by less than 3.000 people. It’s a fantastic town to visit in the summertime, ideally as a part of a road trip in the region.

See also: The Westfjords of Iceland: A 4-Day Hiking and Hot Pool Itinerary

There are plenty of attractions in Ísafjörður and the nearby area. If you are staying in town, you can for example take a dip in the local swimming pool, visit the Westfjords Heritage Museum and enjoy mouth-watering seafood at Tjöruhúsið Restaurant. There are plenty of options for outdoor lovers as well, such as sea kayaking, hiking Mt. Naustahvilft or embarking on a boat trip.

Region: The Westfjords Peninsula

Population: 2,600.

Distance from Reykjavik: 454 kilometers (282 miles). The drive from Reykjavik is around 6 hours. It is possible to fly directly from the capital to Ísafjörður. The flight is very short, or around 40 minutes.

3. Húsavík

The GeoSea Baths seen from the air. Unsplash/Freysteinn G. Jónsson. 

Does the name Húsavík ring a bell? If it does, it may be because the town is the setting of Will Ferrell’s musical comedy film, Eurovision Song Contest: The Story of Fire Saga which was released in 2020. The film’s main protagonists, a couple living in the small town of Húsavík, share the dream of competing in the Eurovision Song Contest on behalf of the Icelandic nation. In my opinion, the town of Húsavík was such a good choice of location for the movie. It is extremely pretty and looks like a textbook example of an Icelandic town.

Book now: The Húsavík Original Whale Watching Tour

Húsavík is also famous for being one of the best spots to go whale watching in Iceland. During the summer, sights of whales are almost guaranteed on those kinds of trips. The latest attraction in Húsavík, the GeoSea baths, has also been a huge success. The gorgeous seaside location of these geothermal baths offers splendid views over Skjálfandi Bay.

Region: North Iceland

Population: 2,300.

Distance from Reykjavik: 463 kilometers (288 miles), which amounts to a six hour drive.

4. Siglufjörður

Siglufjörður on a bright summer's day. Flickr/Markus Trienke. 

Siglufjörður is a village situated on the northern part of the Troll Peninsula in the north of Iceland. For Icelanders, it is famous for being a former hub of herring fishing during the late 19th century until early 20th century. Today, the town’s glorious past is reminisced at the fantastic Herring Era Museum which is located in five exhibition buildings by the harbour.

In the summer, Siglufjörður is an ideal spot for hikers while skiers may want to opt for a wintertime visit. Foodies are also in for a treat – you can sample artisan chocolate by local chocolatier Fríða Gylfadóttir and head to the Segull brewery for a tasting tour afterwards.

See also: 16 Things to Do in Siglufjörður, Iceland

Region: North Iceland

Population: 1,200.

Distance from Reykjavik: 385 kilometres (239 miles) or around five hours by car.

5. Stykkishólmur

The harbour of Stykkishólmur. Unsplash/Misha Levko.

I visited Stykkishólmur for the first time with my grandmother when I was a kid. I remember being fascinated by the beauty of this town, which is situated on a spit of land in the Snæfellsnes Peninsula in the west of Iceland. There are plenty of islands nearby which can be easily seen from the town. The islands, and their abundant birdlife, can also be explored further by boat. 

Stykkishólmur is the largest town in the Snæfellsnes Peninsula, it has a nice hotel and several decent restaurants. There are some very nice attractions close by, such as the picture-perfect Kirkjufell Mountain and the iconic Snæfellsjökull Glacier. The north coast of the Snæfellsnes Peninsula is also a good spot for whale watching. In fact, it is one of the best places in Iceland to spot orcas, also known as killer whales.

Region: West Iceland

Population: 1,200.

Distance from Reykjavik: 172 kilometers (106 miles). The drive takes around 2 and a half hours.