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The 16 Prettiest Towns and Cities in Iceland to Visit

There’s no denying that Iceland is beautiful. Whether you like volcanoes and hot springs or glaciers and Northern Lights, there’s something for everyone. But the towns and cities in Iceland have their own beauty and charm.

The first thing most visitors notice is that cities in Iceland tend to be rather small. The capital city of Reykjavik only has about 125,000 residents (about 185,000 when you count the entire capital region and suburbs). So, even some of the largest Icelandic cities would be nothing more small towns in most countries. But each town has its own unique personality.

There are approximately 108 villages and towns in Iceland. Of those, 16 are exceptional and will be of the greatest interest to visitors. Each of these lovely towns is described below, along with information about the activities, attractions and places of interest you’ll encounter there. The natural beauty and attractions in Iceland are spread out through the entire country, so if you really explore the island, you’ll visit many of these cities on your itinerary.

Here are the best cities in Iceland to visit as you travel counter-clockwise around the country:

Reykjavik

Downtown Reykjavik with the Hallgrimskirkja Church at the top of the street.
The Hallgrimskirkja in downtown Reykjavik

The largest city in Iceland and the capital, Reykjavik seems like a relaxed college town rather than a major capital city. But looks can be deceiving. There’s an energy and allure to this city.

More than 2 million people visit the country annually and the vast majority of them never leave the capital region for more than a day trip or a quick overnight stay. There’s good reason for that: there’s a lot to do in Reykjavik.

There are museums a plenty in the capital, from art and punk rock to history and geology. Nearly everyone to comes makes a trip up the imposing cathedral tower at the Hallgrimskirkja. This incredible building can be seen all over the city and is beautiful in both its elegance and simplicity.

Popular day trips from Reykjavik include the Golden Circle area with its waterfalls and geyser, the Reykjanes Peninsula with its volcano and the Blue Lagoon spa, or whale or puffin boat cruises from the harbor.

And in the evenings, the city is full of fantastic restaurants to fulfill your cravings, bars to enjoy cocktails, and lots of cultural arts. Whether your passion is theatre or street art, you’ll be able to enjoy it here.

Vík í Mýrdal

Church in Vík í Mýrdal with lupine flowers
The church in Vík í Mýrdal on the hill above town

Imagine a village with a fairytale location.  That’s Vík í Mýrdal, or just Vik. Located along a beautiful black sand beach at the base of sea cliffs and beneath a massive volcano. Vik is pretty picture perfect and the less than 500 people who live here are truly blessed with one of the most picturesque locations in the world.

Fortunately, the rest of us are able to visit. The town and surrounding area is a photographer’s dream. The lengthy Reynisfjara Black Sand Beach is one of the most beautiful beaches in the world. Bookended by Basalt columns on one side and the Dyrhólaey sea cliffs on the other, the beach is a rare and beautiful sight.

The Dyrhólaey cliffs offer a good spot for bird watching, including the chance to see puffins during the summer nesting season. These goofy looking birds are incredibly fast in the air, but rather docile on land.

The church in the town of Vik, the Vikurkirkja, on the hillside above town is one of the most photographed buildings in all of Iceland, especially during the early summer when it is surrounded by the purple Nootka lupine flower (sometimes called the Alaskan lupine). The flower is an invasive species, but it is quite pretty.

The iconic church and it’s location also serve another purpose: an evacuation spot should the Katla volcano above the town decide to erupt, melt the Mýrdalsjökull glacier, and send flash floods down upon the town. It may sound farfetched, but it’s happened in other places along the South Coast before.

Höfn

Boats in the harbor at Hofn
The harbor in Hofn

With nearly 2,000 inhabitants, Hofn is classified as a major city in the eastern part of the island. Visitors come to the seaside town of Hofn for three reasons: glaciers, langoustines, and the boats in the harbor (and usually in that order).

What’s the big attraction in Hofn? Glaciers! This city is the closest to the famous Vatnajokull glacier, which feeds the twin glacier lagoons of Fjallsárlón and Jökulsárlón. These lagoons have been featured in numerous movies and are some of the most breathtaking sites in the country. This is particularly true of Jökulsárlón as the lagoon empties into the ocean – the only place in Iceland where a glacier touches the ocean. The result is Diamond Beach – an incredible black sand beach littered with the cracking remnants of glacier pieces. And, on clear days, you can also get a glimpse of the Kverkjökull glacier from the town of Hofn itself.

Hofn thrives on fishing, represented by the numerous boats in the harbor. What are they fishing? Lots of the things, but the town is known for langoustines, sometimes called Norway lobsters. These little shellfish are in the lobster family – a kind of cross between a Maine lobster and crayfish…and incredibly delicious. The town of Hofn has a number of excellent restaurants that feature this decadent delight. If visiting Hofn, make a langoustine dinner one of your priorities.

Djúpivogur

The red Langabud museum in Djupivogur from 1790
The Langabud in Djupivogur is from 1790

The tiny town of Djupivogur is actually one of the bigger towns in this section of Iceland. It has always been a fishing and trading town. Fishing still happens, but these days the only trading are the tourists who visit the town to stock up at the local supermarket.

There’s actually a bit more happening in the town than the casual visitor would initially notice. There are a couple of excellent restaurants in town, and the tourist information building and museum dates from around 1790, built in the immediate aftermath of the bleak period known as the Mist Hardships (which is how Icelanders refer to the Laki Volcano eruption and its aftermath).

The Eggin in Djupivogur
The Eggin

But the village is best known for The Eggin. This public art project is officially called “The Eggs of Merry Bay.” Massive stone recreations of the eggs of the birds that nest in the bay line the harbor area. The 34 eggs were the brainchild of local artist Sigurður Guðmundsson, who created them out of Chinese granite. They’ve become a popular addition to the town.

Egilsstaðir

Gray building in Egilsstadir, oldest in this Iceland town
The oldest building in Egilsstadir is now a popular restaurant

The town of Egilsstadir is the largest city in the eastern section of the country, boasting a population of nearly 3,000. Unlikely nearly every other town in Iceland, Egilsstadir was a planned community, established in 1947 on the site of a farm at the crossroads of major routes through the eastern part of the country. The oldest building in town dates from 1944 and is currently occupied by the Café Nielsen – arguably the nicest restaurant in Eastern Iceland.

You don’t come to Egilsstadir for the town, you come for the access it provides to the wilderness surrounding the eastern fjords. This is a great place for downhill and Nordic skiing, snowmobiling, hiking and mountain biking. And after all of that exertion, head to the Vok Baths for one of the most unusual hot springs experiences in all of Iceland – the giant tubs seemingly float in a lake.

For visitors who are camping or traveling the Ring Road, Egilsstadir makes a great base to access supplies, whether that is a grocery store, a camping store, or a laundromat to wash clothes.

Seyðisfjörður

Yellow house in Seydisfjordur
Seydisfjordur is full of cute, colorful homes

Undeniably, Seydisfjordur is the most picturesque town in Eastern Iceland. This tiny little community has been the country’s link to the outside world for generations. Initially a whaling town, then home to the first telegraph connecting the country with Europe, and now the terminus of the ferry connecting Iceland with Europe, this beautiful town has always been about making connections.

For many European visitors coming on the Smyril Line Ferry from Europe, this is their first taste of Iceland. The town is a blend of industrial fishing port and hip artistic community. In 1957, the famous German artist Dieter Roth moved here and established an art institute. Today, the Dieter Roth Academy is part art institute, part community center, and part Skaftfell Bistro – a cool, relaxed café serving remarkably good pizzas.

This town is truly beautiful. Whether it is the famous blue church and its rainbow street, or the surrounding mountains and waterfalls, there is no shortage of pretty things to gawk at.

Húsavík

Wooden buildings in Husavik
The seaside town of Husavik

Remote Husavik lays claim to being the oldest settlement in Iceland. It is also the whale watching capital of the country. The town sits on Shaky Bay, a deep body of water surrounded by steep cliffs with waterfalls that bring nutrients to the fish that the whales ultimately eat. Several different companies run whale watching tours in Husavik all year long and boast a near perfect success rate in seeing one of the over 20 species of whales that make their home in the bay.

As if that wasn’t good enough, add to it a pretty town with good restaurants and the magnificent GeoSeo Thermal Spa, and you have a recipe for perfection.

The town was recently made famous by the movie, Eurovision Song Contest: The Story of Fire Saga. It’s also one of our favorite towns in Iceland. We’ve visited Husavik on every one of our trips to Iceland.

Akuryeri

Blue building with red roof on main street in Akuryeri
The colorful buildings along Art Street, the main street in town

Set in a glacial fjord, Akuryeri is sometimes called Iceland’s second capital or its northern capital. It’s a university town that has a young, hip vibe and makes an excellent base for exploring the northern part of the country for visitors who don’t want to move around.

Like Reykjavik, the skyline in Akuryeri is dominated by a church, the Akureyrarkirkja Church. It’s a popular photography spot with the ‘stairway to heaven’ leading up to the front doors, the massive organ with over 3,000 pipes, and even a ship that hangs from the ceiling inside.

In the winter, the best ski resort in Iceland can be found just above the town. It also makes an excellent base to view the Northern Lights because you can travel in several directions to find weather and clear skies favorable to see the aurora borealis.

In the summer, visitors who don’t visit Husavik might give whale watching a chance here. The success rate is a bit lower, although there’s always a chance. Or just take a table at one of the cafes along Art Street and chat with a local.

Ólafsfördur

Murals of trolls on side of red building
The troll murals in Olafsfordur are said to be based on people living in the town

Situated in a deep glacial valley on the Tröllskagi peninsula, the town of Olafsfordur is the kind of place that seems like time forget. There’s a fishing industry here that’s in decline, so the town is looking to tourism to revitalize the community. And with good reason, the region surrounding it is popular with backcountry and Nordic skiers, and there’s also a ski jump right in town. If you’ve ever wanted to try extreme heliskiing, this is the place.

The town itself is memorable for two reasons. First, they have gone all in on the Disney Frozen movie, which features a snowman named Olaf. It doesn’t take a genius to make the connection. Second, the town is full of street art murals of trolls, many of which are really quite creative. The town is on the Tröllskagi peninsula…so trolls.

Siglufjörður

Red herring museum in Siglufjordur
The red Herring Museum across from the harbor

This sleepy town is frequently credited as the northernmost town in Iceland – a distinction which largely rests on what is considered a ‘town.’ Yet, with a population of just over 1,000, Siglufjordur qualifies.

The color buildings make Siglufjordur one of the best cute towns to visit. It’s compact and walkable. The harbor area is very pretty and the Herring Museum is not to be missed (or photographed!). The town makes a great lunch spot or overnight base for those exploring the Tröllskagi peninsula.

Hvammstangi

Red exterior of Icelandic Seal Center Museum
The Icelandic Seal Center is also a good place to watch whales from shore

The tiny village of Hvammstangi is exactly halfway between Akuryeri and the capital of Reykjavik, and makes a nice base for visitors looking to break up the drive. The town sits on the Vatnsnes Peninsula adjacent to the deep-water Miðfjörður fjord. While the hills on either side are not as steep or as impressive as other fjords elsewhere in Iceland, there’s another reason to visit this town: marine mammals.

It is home to the Icelandic Seal Center right at the harbor. Here, visitors can learn about these marine mammals and where on the Vatnsnes Peninsula to see them. The staff are extremely helpful in providing directions. While there, pause and look out the fjord. Do you see anything? Perhaps whales. This is a good spot to watch whales in the deep fjord right from the shoreline. The center has conveniently placed picnic tables along the water.

Ísafjörður

Red house in Isafjordur
Cute red house in Isafjordur

The remote town of Isafjordur is the largest town in the Westfjords and is at the top of many people’s lists for best Iceland cities. Like most coastal cities and towns, this one was built on the fishing industry and it’s fortunes rose and fell with the quantity of the catch. While fishing still remains an important industry, tourism has taken over.

These days, Isafjordur is the main base of the tourist industry in the Westjfords and a great base to explore the region. Whether your interests are skiing, hiking, or looking for puffins, this is the spot. Most of the outfitters that run excursions into some of the more remote parts of western Iceland are based here. You’ll likely also see some mega-yachts in the harbor during the summers.

Add to that quality hotels and lots of excellent restaurants, Isafjordur should be your list. And while you’re in town, stop by and see the oldest building in Iceland, dating from 1734, which is now part of the local museum.

Patreksfjörður

Two puffins on sea cliff
The puffins on the Latrabjarg Sea Cliffs are close to Patreksfjordur

We’re going to be honest, as a town, Patreksfjordur isn’t all that pretty. What it has is a prime position in the lower Westfjords. It supports a vibrant fishing industry and a number of fish farms located in the deep fjord.

For tourism, Patreksfjordur is the closest city to the seven-tier Dynjandi waterfall, the most beautiful waterfall in Iceland. It is also the only town with services near the famed Latrabjarg Peninsula. This hammer-shaped peninsula is home to the Latrabjarg Sea Cliffs, the best place in Iceland to see puffins, and also a number of spectacular beaches, including the famous red beach and the gold beach.

Stykkishólmur

Boats in a harbor
The busy harbor of Stykkisholmur

The town of Stykkisholmur is arguable the most beautiful town in Iceland. Situation on a rocky outcrop on the Snæfellsnes peninsula, Stykkisholmur was historically also one of the wealthiest cities in Iceland. The town built up around a Danish trading monopoly, which operated from 1550 until the end of the 18th century. While Denmark had exclusive trading rights, all of the town benefitted from the wealth. It has also gone to the big screen in The Secret Life of Walter Mitty.

The beautiful buildings, excellent seafood restaurants, and wonderful harbor make this a town not to miss. The ferry to the Westfjords and Flatey Island leaves from here. This is also the largest city on the Snæfellsnes and a good base to explore the area, including the famous Kirkjufell mountain.

Grundarfjörður

Re-creations of buildings and boat at a heritage museum
Demonstration boats and buildings at the museum

The village of Grundarfjordur is pretty for one very important reason: this town has the best view in all of Iceland. Located on a natural port, this town was one of the original Danish trading posts going back over 600 years. And fishing has kept the economy alive ever since. There’s a good little heritage museum right in the heart of town.

But it looks out on Kirkjufell, the most photographed mountain in all of Iceland. The fortune’s of the town surged when the mountain was used as Arrow Head Mountain in Game of Thrones. And the tourists have been coming in waves ever since. While the mountain is stunning, there are nearly a dozen equally impressive waterfalls along the north coast of the Snaefellsnes to photograph as well.

While much smaller than Stykkishólmur, this town is much closer to both Kirkufell and also the Snaefellsnes National Park, making it a more popular option for many travelers.

Hellissandur

Mural of a ram with horns on side of a building
The many murals in Hellissandur

This small village sits immediately adjacent to the entrance for the Snæfellsness National Park. It makes a great base for visitors prioritizing the hiking and bird watching within the park.

Hellissandur is one of the most unexpectedly awesome Iceland towns. The whole town has gone in on street art and the village bills itself as the self-proclaimed “Street Art Capital of Iceland.” While Reykjavik may disagree, there is no denying both the quantity and quality of street art murals in Hellissandur. The brainchild of the local hostel, it has promoted tourism in the area and gotten travelers to stop and check out the artworks.

Do you have a favorite city in Iceland? Share your favorite city or town in the comments below.

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