20 Beautiful Towns and Villages in Iceland Worth Visiting

Iceland may be famous for waterfalls, glaciers and volcanoes, but its towns and villages are an important part of any journey around the country.

Outside Reykjavík, most communities are small. Many grew around fishing harbours, trading posts or farming districts, and their location between mountains, fjords and the ocean gives them a character that is very different from larger European towns.

This guide focuses on communities worth slowing down for rather than simply driving through.

Highlights include Seyðisfjörður, Djúpivogur, Siglufjörður, Stykkishólmur, Ísafjörður and Vík í Mýrdal.

The Eastfjords contain some of Iceland's most distinctive small communities, often squeezed between steep mountains and narrow fjords.

Seyðisfjörður

Seyðisfjörður is surrounded by mountains, waterfalls and green hillsides. Colourful wooden buildings, a strong arts scene and its picturesque harbour give the town a character unlike anywhere else in Iceland.

Djúpivogur

Djúpivogur is a peaceful fishing village beneath the distinctive Búlandstindur mountain. Its historic harbour, relaxed atmosphere and the Eggs of Merry Bay artwork make it worth more than a quick roadside stop.

Borgarfjörður Eystri

Borgarfjörður Eystri combines a tiny community with extraordinary mountain scenery, hiking routes and some of Iceland's best-known puffin viewing opportunities.

Neskaupstaður

Neskaupstaður lies dramatically between steep mountains and the sea at Norðfjörður. It provides a fascinating glimpse into everyday life in one of Iceland's more remote coastal towns.

North Iceland offers everything from a regional city to tiny historic fishing villages.

Akureyri

Akureyri is the largest town in North Iceland and an excellent base for exploring Eyjafjörður. The compact centre, botanical garden, cafés and surrounding mountains make it worth spending at least a day here.

Húsavík

Húsavík sits beside Skjálfandi Bay and has become closely associated with whale watching. Its harbour, wooden church and coastal setting give it the atmosphere of a classic Icelandic fishing town.

Siglufjörður

Siglufjörður lies at the end of a narrow fjord surrounded by steep mountains. The town's remarkable herring history and colourful harbour make it one of North Iceland's most atmospheric places.

Hofsós

Hofsós is one of Iceland's historic trading settlements. Today the tiny village is known for coastal scenery, basalt formations and its beautiful setting overlooking Skagafjörður.

Dalvík

Dalvík is a fishing town on Eyjafjörður surrounded by impressive mountains. It is also a departure point for Grímsey and a good base for exploring the western side of the fjord.

Hvammstangi

Hvammstangi sits close to the Vatnsnes Peninsula and is strongly associated with Iceland's seals. Its harbour and location make it a useful stop when travelling between West and North Iceland.

The settlements of the Westfjords are shaped by steep mountains, narrow strips of buildable land and a long relationship with the sea.

Ísafjörður

Ísafjörður is the main town of the Westfjords. Its historic centre, harbour and dramatic mountain surroundings make it the natural base for exploring the northern part of the region.

Flateyri

Flateyri occupies a narrow spit of land in Önundarfjörður. The small village has a strong community identity and a striking location beneath the mountains.

Patreksfjörður

Patreksfjörður is one of the main communities of the southern Westfjords and works particularly well as a base for exploring nearby coastal landscapes and attractions.

The Snæfellsnes Peninsula contains several of Iceland's most photogenic coastal communities.

Stykkishólmur

Stykkishólmur overlooks the islands of Breiðafjörður and is known for its colourful historic houses, harbour and well-preserved old town.

Grundarfjörður

Grundarfjörður occupies a spectacular position between the sea and mountains. Nearby Kirkjufell has made the area famous, but the town itself is also an enjoyable place to explore.

Arnarstapi

Arnarstapi is a tiny settlement beneath Snæfellsjökull. Its dramatic coastline, sea cliffs and walking path towards Hellnar make it one of the most scenic village stops on Snæfellsnes.

Most travellers visit South Iceland for its famous natural attractions, but several communities are worth exploring along the way.

Vík í Mýrdal

Vík í Mýrdal is the southernmost village in Iceland. Its church, black-sand coastline and location close to Reynisfjara and Dyrhólaey make it one of the most recognisable villages on the South Coast.

Hveragerði

Hveragerði is built directly on an active geothermal area. Steam, hot springs, greenhouse cultivation and easy access to Reykjadalur give the town a distinctive identity.

Eyrarbakki

Eyrarbakki was once one of Iceland's most important trading centres. Historic houses and its quiet coastal setting make the village particularly interesting for travellers interested in Icelandic history.

Stokkseyri

Stokkseyri is another small South Coast village with a strong relationship with the sea. Together with nearby Eyrarbakki it provides a quieter alternative to the busiest South Coast attractions.

Many of these communities naturally fit into the major driving routes around Iceland.

Travellers following the Ring Road can combine Vík, Djúpivogur, Akureyri and Húsavík with nearby natural attractions.

Snæfellsnes can easily include Arnarstapi, Grundarfjörður and Stykkishólmur in the same journey.

The Westfjords deserve considerably more time because distances are greater than they appear on a map. Ísafjörður, Flateyri and Patreksfjörður are best treated as part of a longer regional trip rather than quick detours.

Stopping in Iceland's smaller communities adds another dimension to a road trip.

They provide opportunities to visit local swimming pools, museums, cafés, harbours and cultural sites while seeing how people live in landscapes that can appear almost completely wild from the road.

Spending a night in a small town also makes it easier to explore nearby attractions early in the morning or later in the evening, outside the busiest sightseeing hours.

Places such as Seyðisfjörður, Siglufjörður and Stykkishólmur are destinations in their own right rather than simply service stops.

What are the most beautiful towns in Iceland?

Seyðisfjörður, Siglufjörður, Stykkishólmur, Ísafjörður, Djúpivogur and Vík are all known for particularly striking surroundings and distinctive character.

What towns should I visit on the Ring Road?

Vík, Djúpivogur and Akureyri fit naturally into a Ring Road itinerary. Other towns may require worthwhile detours.

Which Icelandic town is best for the Eastfjords?

Seyðisfjörður, Djúpivogur and Borgarfjörður Eystri all offer very different East Iceland experiences.

Which towns should I visit on Snæfellsnes?

Stykkishólmur, Grundarfjörður and Arnarstapi are three excellent stops on a journey around the peninsula.

Is it worth staying overnight in small Icelandic towns?

Yes. Staying overnight can make a road trip more relaxed and gives travellers more time to experience local restaurants, swimming pools, museums and nearby attractions.