Iceland is known for its dramatic landscapes, from volcanoes and glaciers to waterfalls and black sand beaches. The country also offers diverse towns across regions like the Capital Region, South Coast, North Iceland, and the Westfjords.
Many travelers choose Iceland vacation packages to combine these destinations into one seamless trip. These itineraries make it easier to experience multiple regions without complex planning.
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Traveling between locations is straightforward with car rentals in Iceland, guided tours across the country, or domestic flights between regional airports. Many towns sit along the Ring Road, making them easy to include in a self-drive itinerary.
If you stay in the capital, it’s easy to join day tours from Reykjavik to explore waterfalls, glaciers, and geothermal areas. You can also use guides to the top things to do in Iceland to plan your route.
Whether planning a full road trip or focusing on one region, Iceland’s towns offer varied experiences. Read on to discover the best places to visit and how to plan your journey
Key Takeaways
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Iceland's top cities and towns are spread across regions like the Capital Region, South Coast, North Iceland, Eastfjords, and the Westfjords, each offering distinct landscapes and experiences.
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Reykjavik is the main travel hub, with the widest range of accommodations, tours, dining, and easy access to nearby attractions and day trips.
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Remote towns such as Isafjordur, Holmavik, and Seydisfjordur offer quieter settings, a unique culture, and fewer crowds for a more immersive experience.
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Coastal destinations like Vik, Hofn, and Husavik provide direct access to Iceland's most famous natural attractions, including glaciers, black sand beaches, and whale-watching areas.
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This range of destinations makes it easy to plan a flexible itinerary that combines major highlights with lesser-known towns across Iceland.
Towns and Cities Worth Visiting in Iceland
Over a hundred human settlements are in Iceland's 36,000 square miles (103,000 square kilometers) land area. These settlements are divided into one city, several municipalities, dozens of towns, and many villages that vary in population, amenities, and services.
For this list, we are including settlements from all the regions of Iceland, particularly the Capital Region, South Iceland, West Iceland, North Iceland, and the Eastfjords and the Westfjords.
Most of these locations nestle in charming coastal areas because of the fertile waters provided by the Atlantic Ocean.
Whether you want to explore the rich culture of Iceland in Reykjavik or see the gentle giants of the sea in Husavik, the whale-watching capital of Europe, each destination offers a distinct experience across the country.
Here are the 20 best cities and towns to visit in Iceland on your next holiday vacation.
20. Akranes
If you want an introduction to the beautiful coast of West Iceland, the port town of Akranes is one of your best options. With a pair of iconic lighthouses, a rewarding mountain hike, and a folk museum that brings Iceland's maritime history to life, it packs a lot into an easy half-day trip.
Akranes is perfect for explorers who don't want to travel far from the Icelandic capital and the airport. The coastal town is just 30.5 miles (49 kilometers) from Reykjavik.
When in Akranes, don’t miss the exhibitions at the Akranes Folk Museum and the views from Akrafjall Mountain. The museum features preserved houses and boats that showcase Iceland’s local history.
Akrafjall Mountain is a popular hiking spot with trails that overlook the bay of Akranes. From the summit, you’ll get wide views of the coastline and surrounding landscapes.
One of Akranes' most recognizable landmarks is its pair of lighthouses at the tip of the peninsula. The older is a charming relic of the town's maritime past, while the newer Akranesviti lighthouse is open to climb for panoramic views over the Atlantic.
The easiest way to reach Akranes is to rent a car in Iceland and make the short drive from Reykjavik. It makes a rewarding half-day trip or a relaxed first stop on a West Iceland road trip.
19. Holmavik
Holmavik is a small fishing village on the Strandir shoreline of the Westfjords, resting by the beautiful Steingrimsfjordur Fjord. What sets it apart from other coastal towns is a surprisingly dark history of witchcraft, sorcery, and witch-hunt trials dating back to the 17th century.
Those who want to explore Iceland's magic and witchcraft history should visit Holmavik's Museum of Icelandic Sorcery and Witchcraft. The museum exhibits artifacts such as Icelandic runes and the infamous necropants. You can visit it all year round for a minimal fee.
Explore Holmavik and its fascinating museum by renting a car in Iceland and driving through the remote Westfjords. The town is 144 miles (232 kilometers) from Reykjavik and 138.5 miles (233 kilometers) from Isafjordur, the largest town in the region.
18. Hafnarfjordur
Hafnarfjordur is a coastal town in the Capital Region that rewards travelers who look beyond its location in Reykjavik's shadow. It has a strong identity of its own, shaped by a deep-rooted music scene and some of the most vivid folklore traditions in Iceland.
The most fantastic thing about this town near Reykjavik is its rich culture. Hafnarfjordur is locally known as Iceland's Rock and Roll capital, with homegrown bands such as HAM, Ulpa, Jakobinarina, and Jet Black Joe.
In addition, local folklore is an important part of life in this town. Stories of the Huldufolk, or Hidden Folk, are deeply rooted in the area.
The Huldufolk are mythical beings believed to live in a parallel world alongside humans. According to legend, they can reveal themselves at will.
To learn more about this third most populous city in Iceland and its attractions, you can book your stay from our selection of the best accommodations and hotels in Hafnarfjordur.
17. Grindavik
Grindavik is a fishing town of around 3,000 people on the Reykjanes Peninsula, about 32.5 miles (52.5 kilometers) from Reykjavik. For travelers wanting to witness Iceland's volcanic activity up close, it is one of the most extraordinary places to visit right now.
In recent years it has become one of the most talked-about destinations in Iceland, thanks to a series of volcanic eruptions that have reshaped the landscape around the town.
The Reykjanes Peninsula has experienced twelve eruptions since 2021, several of them close to Grindavik. The most recent occurred in July 2025 and ended in early August.
Grindavik is currently open to visitors, though the area remains volcanically active and conditions can change quickly. Crevasses are present in parts of the town, so staying on marked paths is essential.
In the event of increased volcanic threat, evacuation sirens will activate. Visitors should take note of exit routes upon arrival.
When visiting, the landscape around Grindavik is extraordinary. Fresh lava fields, craters, and fissures stretch across terrain that barely existed a few years ago.
Clearly marked hiking trails allow visitors to explore the eruption sites safely. For the best experience, join a guided volcano hike or combine the adventure with a Meradalir volcano hike and northern lights tour. You can also browse all available volcano tours in Iceland to find the right option for your trip.
Grindavik is also the closest town to the Blue Lagoon, Iceland's most famous geothermal spa, located just minutes away. The town itself has a handful of restaurants and a swimming pool open during the summer.
16. Egilsstadir
Nature lovers who want to escape the busyness of crowded attractions while still enjoying town amenities will find Egilsstadir the perfect spot to visit.
Egilsstadir is one of the few towns on this list that lies inland from the coast. The nearest coastal area to it is Seydisfjordur town, 17 miles (27 kilometers) away. However, like any booming settlement in history, Egilsstadir lies on a rich riverbank, particularly by the Lagarfljot River.
The beautiful town of 2,500 locals is considered the capital of the Eastfjords. Despite its remote location and distance from the Icelandic capital, its sprawling farmlands and valleys by the river banks helped the town flourish. You can find an airport, grocery stores, shops, gas stations, and hotels in Egilsstadir.
The famous Vok Baths Spa is also located here, an architecturally stunning geothermal bathing experience set directly on a lake just outside town.
Visiting Egilsstadir will also give you the best opportunity to see the majestic wild reindeer of Iceland. During winter, you can spot these wild animals in the town's surrounding mountains and valleys.
In addition, if you want to see the lush Hallormsstadaskogur Forest, the most extensive national forest in Iceland, a trip to Egilsstadir sounds more convincing. The forest covers 1828 acres (740 hectares) of land with 85 tree species.
Egilsstadir is one of the furthest towns from Reykjavik, 394.5 miles (635 kilometers) away. However, you can fly to Egilsstadir Airport from Reykjavik's Domestic Airport.
15. Borgarnes
One of the towns along the Ring Road of Iceland is Borgarnes. The settlement's proximity to Reykjavik and the Snaefellsnes Peninsula makes it an ideal place for a pitstop in West Iceland. It is 47 miles (76 kilometers) from the capital.
The Settlement Center Museum alone makes it worth the stop, offering two immersive audio exhibitions on Iceland's Viking-age founding.
Borgarnes has everything you need for a short or long stay, including restaurants, cafes, gas stations, shops, and accommodations like Hotel Borgarnes and Bjarg Borgarnes.
One of the popular food places here is the Geirabakari bakery, featured in the comedy movie The Secret Life of Walter Mitty.
Other attractions to see in Borgarnes are the Settlement Center Museum, Borgarnes swimming pool, and the Troll Waterfall.
14. Hveragerdi
Iceland is known for its awe-inspiring geothermal areas, and few towns embody this better than Hveragerdi, just 29 miles (46.5 kilometers) from Reykjavik.
Hveragerdi is regarded as the "Hot Spring Town" of Iceland due to the geothermal and geological activities in the area. You can experience the famous Icelandic geothermal bath in town or the nearby Reykjadalur Valley.
Because heat is readily available in Hveragerdi, greenhouses are thriving here. You can buy vegetables and fruits like tomatoes, lettuce, cucumbers, and bananas from these green farms throughout the year.
Travelers to Iceland can stop by the geothermal town on their way to the top attractions of the South Coast.
13. Selfoss
One of the best places to get a taste of Icelandic cuisine is Selfoss, a town of nearly 9,000 people in South Iceland. The settlement is 36.5 miles (58.5 kilometers) from Reykjavik.
Selfoss has undergone an exciting transformation in recent years with the development of its New Old Town center. Opened in 2021, this pedestrianized quarter features a town square, over 20 restaurants, cafes, and bars, and a mix of independent shops.
The buildings are newly constructed but built to replicate older wooden structures from across Iceland that no longer exist, giving the area a distinctive character.
The centerpiece of the New Old Town is the Mjolkurbuid, also known as the Old Dairy of Selfoss. This food hall sits near the banks of the Olfusa River.
The venue features eight restaurants, bars, and a skyr exhibition. You can try Icelandic, Mexican, Italian, and Asian dishes in a space that accommodates up to 300 people.
The Skyrland exhibition in Selfoss highlights the history and process of making skyr. This superfood is similar to yogurt but has a creamier texture.
12. Kopavogur
Photo from Sky Lagoon Ticket.
Kopavogur is a large town in the Capital Region, just south of Reykjavik, and home to one of Iceland's most popular geothermal experiences. The town's name translates to "seal pup bay" because of the presence of seals on its coasts. However, spotting seals in the area is rarer these days.
The Icelandic town is bustling with local and international shops, bars, restaurants, and other town services. The biggest mall in Iceland, Smaralind, is located in Kopavogur.
Sky Lagoon is one of the most popular attractions in Kopavogur, known for its modern geothermal spa experience. The lagoon opened in 2021 and has quickly become a top place to relax near Reykjavik.
Visitors can enjoy a geothermal bath in an infinity pool that overlooks the Atlantic Ocean. The spa is surrounded by lava rock formations and offers a more serene alternative to larger, busier bathing spots.
Book your Sky Lagoon tickets in advance, as it fills up quickly, especially on weekends.
11. Isafjordur
Isafjordur is one of the most rewarding destinations in Iceland, with its fantastic location by the scenic Isafjardardjup fjord, rich culture and history, and access to the best attractions of the Westfjords.
Isafjordur is the largest settlement in the least visited region of Iceland, the Westfjords. Although it is considered the region's center of economy and tourism, it remains an off-the-beaten-path destination with far fewer crowds than Iceland's more famous stops.
The Icelandic town has deep roots in the founding of Iceland. According to historians, one of the Nordic country's first settlers lived in Isafjordur in the ninth century.
As a fishing town, the food tourism in Isafjordur is something everyone must try. Restaurants like Tjoruhusid and Edinborg Bistro serve tasty seafood menus, particularly seafood soup, different fish recipes, and lamb.
Above all, Isafjordur is for travelers who want an unforgettable adventure surrounded by nature. The town remains the top choice to start a tour in the Westfjords. For example, this three-day guided kayaking tour in the Westfjords and this 10-hour Arctic fox watching in Hornstrandir Nature Reserve depart from Isafjordur.
You can fly to Isafjordur Airport from Reykjavik or drive the 281 miles (454 kilometers) between them.
10. Siglufjordur
Tucked at the end of a narrow fjord surrounded by steep mountains, Siglufjordur is one of the most scenically dramatic small towns in North Iceland.
Once the herring capital of the North Atlantic, it now draws visitors for its award-winning museum, outdoor activities, and unhurried atmosphere.
The town also offers a range of outdoor activities, from skiing and snowboarding in Iceland during winter to camping in the warmer months.
The town of Siglufjordur used to be the capital of herring fishing in the North Atlantic back when the forage fish was thriving in the seas of Iceland. As the fishing industry slowly weakened, tourism and the service sector started to pick up.
As a cultural hub, visiting the Herring Era Museum is essential in Siglufjordur. This award-winning museum features five exhibits across three buildings and showcases the history of Iceland's herring industry through artifacts.
Other activities you can do on your self-drive tour to Siglufjordur are golfing on its nine-hole golf course, skiing in the beautiful Skardsdalur resort, and in summer, kayaking, stand-up paddleboarding, and cycling on the fjord.
Siglufjordur may be 238 miles (385 kilometers) from Reykjavik, but it is only 48 miles (77.5 kilometers) from the "Capital of the North," Akureyri.
9. Seydisfjordur
A trip to East Iceland is only complete with stopping by the quaint Seydisfjordur Town, 17 miles (27 kilometers) from Egilsstadir. Surrounded by mountains and a fjord, Seydisfjordur is one of the most beautiful settlements in Iceland.
The most prominent landmarks in this town are the two mountains of Strandartindur and Bjolfur, peaking at over 3,280 feet (1,000 meters). These mountains and surrounding landscapes offer hiking trails for all levels.
On the other hand, those who prefer a more laid-back environment will enjoy exploring the town center. For example, the Rainbow Street of Seydisfjordur is easily one of the most photographed areas in town. If you want to visit this lovely town, make sure to book accommodations in Seydisfjordur to guarantee a room.
8. Keflavik
Most foreign adventurers to Iceland have visited Keflavik because the biggest airport in the country, the Keflavik International Airport, is located in this town. However, only some have stayed longer to explore its natural and cultural attractions.
Keflavik is a town in Southwest Iceland and part of the Reykjanesbaer municipality. It is one of the closest towns to the Blue Lagoon, Iceland's most visited attraction, located just a short drive away.
The Blue Lagoon is a geothermal spa known for its mineral-rich, milky blue waters. It is one of the most popular places to experience a geothermal bath in Iceland.
In addition to its plethora of natural sceneries, music lovers will particularly enjoy this coastal town because it hosts the Icelandic Museum of Rock 'n' Roll.
Enjoy learning about the history of rock and pop music in Iceland, with exhibits dedicated to famous Icelandic artists like Bjork, Sigur Ros, Paul Oscar, and the rock band Of Monsters and Men.
Keflavik and Reykjavik are 30.5 miles (49 kilometers) apart.
7. Hofn
Hofn is a fishing town of 2,000 residents that serves as a haven for weary travelers on the Ring Road. Its convenient location between the South Coast and Eastfjords regions makes it an ideal place to relax and recharge.
As a fishing town, Hofn is nicknamed the "lobster capital of Iceland" because Icelandic lobster catches are processed here. So while staying in accommodations like Hotel Hofn or Hofn Inn Guesthouse, don't miss the chance to try some lobster and seafood dishes.
Hofn is a common starting point for tours in Vatnajokull National Park. Many travelers use the town as a base for exploring the surrounding glacier landscapes.
Vatnajokull, the largest glacier in Europe, towers over the area and offers a range of activities. Popular options include the three-hour glacier snowmobiling tour on Vatnajokull from Hofn and the ice-caving tour from Jokulsarlon.
Hofn is 284.5 miles (458 kilometers) from Reykjavik and 157 miles (253 kilometers) from the largest town in the East, Egilsstadir.
6. Stykkisholmur
Film buffs or anyone who keeps up with pop culture will recognize the sixth-best town worth visiting in Iceland, Stykkisholmur. After all, it was a central filming location in the 2013 comedy film The Secret Life of Walter Mitty, starring Ben Stiller.
Beyond its popularity as a filming location, Stykkisholmur serves as the capital of the Snaefellsnes Peninsula.
The town is an essential commercial, cultural, and tourism hub connecting many villages in its vicinity, from the Westfjords to Flatey Island.
As a cultural hub, there are many things to explore in the area, including landmarks, restaurants, and museums. The Eldfjallasafnid Volcano Museum, Stykkisholmskirkja Church, and the Norwegian house are historical locations worth seeing in the area. While doing so, you also have viewing access to the natural harbor of Stykkisholmur.
While staying in Stykkisholmur, the most beautiful attractions of the Snaefellsnes Peninsula are within your reach.
On a self-drive tour of Snaefellsnes or a guided tour of the Westfjords, you can take photographs of Kirkjufell Mountain, Snaefellsjokull Glacier, Budir Black Church, and more.
Stykkisholmur is 107 miles (172 kilometers) from Reykjavik.
5. Vestmannaeyjar
When people think of Iceland, one of the things that comes to mind is puffins. Millions of these cute birds, with black and white feathers and a distinct beak, nest in the archipelago of Vestmannaeyjar during summer, hence the label, the puffin capital of the world.
Vestmannaeyjar, also known as the Westman Islands, is an archipelago of 15 small islands off the coast of South Iceland. The biggest island, Heimaey, is the only one inhabited by around 4,500 people.
Aside from its colonies of puffins, what makes the Westman Islands one of the best towns in Iceland is its beautiful natural scenery. Unique lava fields, stunning cliffs, and volcanoes surround the islands. The most recognizable attraction in the area is the Eldfell Volcano at 660 feet (200 meters).
You can see the puffins, Eldfell volcano, the Elephant Rock formation, and more places of interest in Vestmannaeyjar by jumping aboard this private tour to the Westman Islands from Reykjavik or this Super Jeep day tour with round-trip transfers.
The ferry to Heimaey is 85 miles (137 kilometers) from Reykjavik.
4. Husavik
The fertile seas and oceans surrounding Iceland make it an ideal feeding ground for marine animals. But there is one specific place in the country known for its beautiful bay, where diverse marine wildlife thrives, the town of Husavik.
Husavik is a peaceful town by the lovely Skjalfandi Bay in North Iceland, 47 miles (75.5 kilometers) from Akureyri. Travelers often call the village the whale-watching capital of Europe, as whales and other marine life roam its waters.
If you want a close encounter with humpback whales, minke whales, porpoises, white-beaked dolphins, and other species, this area is one of the best places to see them. Don’t miss the chance to join a small group whale-watching tour from Husavik.
Meanwhile, those who want a relaxing time in Husavik should visit the GeoSea geothermal baths. This geothermal spa lies on the coastline and features naturally-heated seawater.
3. Vik I Myrdal
Vik might be one of the smallest villages on this list, but it sits at the heart of the South Coast's most iconic attractions. It nestles on the southernmost tip of mainland Iceland with a panoramic view of the coastline and the Atlantic Ocean, 116 miles (187 kilometers) from Reykjavik.
Vik village is usually part of itineraries for tours on the South Coast of Iceland. It's the only town within a 40-mile (64-kilometer) radius in the region where you can enjoy services like grocery stores, souvenir shops, cafes, and gas stations.
There are also accommodation options, Vik Cottages and Hotel Vik I Myrdal, if you plan on stopping longer.
What attracts Icelanders and foreign adventurers to Vik is its unrivaled access to the top attractions of the South Coast. There are also plenty of exciting tours in Vik.
The Reynisfjara black sand beach and Dyrholaey Peninsula are just outside the town center. These coastal attractions are geological wonders of volcanic sands, basalt columns, and rock formations constantly pounded by the raging waves of the Atlantic.
In addition, Skogafoss Waterfall, Seljalandsfoss Waterfall, and Myrdalsjokull Glacier are less than an hour's drive from Vik.
- Learn more: The Ultimate Guide to Iceland's South Coast
2. Akureyri
Search the internet for blogs discussing the best towns in Iceland, and it's almost assured that Akureyri is on the list and near the top.
Akureyri earns the title Capital of the North, the gateway for locals and travelers to North Iceland. The city with 19,000 people enjoys a coastal location in one of the longest fjords in Iceland, Eyjafjordur.
As the gateway to North Iceland, Akureyri boasts proximity to some diverse regional attractions. So if you plan to tour the Diamond Circle and explore the Myvatn area, the city makes an excellent base to start your journey.
But before jumping into the exceptional natural spots outside the city, take advantage of the exciting attractions in Akureyri. For example, the Akureyrarkirkja Church, Akureyri Botanical Garden, and the Laufas Turf Houses are just some things to see in the area.
As one of the towns in Iceland nearest to the Arctic Circle, the outskirts of Akureyri are one of the best places to see the northern lights of Iceland.
Get the chance to see the elusive yet magical aurora borealis on adventures like this 2.5-hour northern lights hunting tour from Akureyri or this small-group northern lights hunt on a minibus.
Akureyri is 240.5 miles (387 kilometers) from Reykjavik.
1. Reykjavik
Iceland is filled with remarkable cities and towns, but none are as awe-inspiring as its capital, Reykjavik. With over a million travelers visiting each year, Reykjavik takes the top spot on our list.
There's so much to see and do in Reykjavik that just a day of exploring cannot accommodate it. The Icelandic capital boasts a vibrant community where you can taste Icelandic culture at its best.
Impressive streets, colorful houses, unique museums, green parks, and iconic landmarks dot the vast downtown scene. If you wish to visit Reykjavik Art Museum, the National Museum of Iceland, Reykjavik Family Park, and more cultural places, don't forget to purchase a Reykjavik city card for better city access.
With its friendly pedestrian streets, any visitor will enjoy taking a walking tour of Reykjavik. In particular, exploring the scenic streets of Laugavegur, Skolavordustigur, and Austurstraeti will lead you to the best restaurants, cafes, and hotels in Reykjavik.
While in the area, make sure to take photos of the iconic Hallgrimskirkja Church and Harpa Concert Hall.
In addition, staying in Reykjavik is also your best chance to experience the nightlife of Iceland. You can even go bar-hopping with a local on this guided beer and schnapps tour in Reykjavik.
Meanwhile, two of the most thrilling activities in Reykjavik are whale watching in summer and northern lights hunting in winter. The clear waters of Faxafloi Bay surrounding the city provide an excellent avenue for these sea adventures.
Plan Your Trip to the Best Cities and Towns to Visit in Iceland
Exploring Iceland’s cities and towns is one of the best ways to experience the country’s landscapes, culture, and daily life. Reykjavik offers museums, dining, and urban experiences, while villages in the Westfjords and Eastfjords reflect quieter communities shaped by coastal and remote settings.
Many of these places are connected by the Ring Road, making it easy to travel between regions. Using a car rental in Iceland or booking vacation packages can simplify logistics and help you move efficiently across the country.
Where you go will depend on your travel style and available time. Some travelers focus on well-known destinations, while others seek quieter towns with fewer crowds and a stronger local feel.
A clear route and a few key stops can help you experience both major highlights and lesser-known locations. This balance makes it easier to explore multiple regions without rushing your trip.
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What are the best towns to visit in Iceland?
We hope this list helps you identify the towns and cities to visit on your next vacation to Iceland with Guide to Iceland. Don't hesitate to reach out to us if you think we should add more exciting Icelandic locations that you have previously enjoyed exploring.
I'm a travel storyteller with a deep love for all things Iceland. I share and write stories about the land of fire and ice’s top spots (plus hidden gems), thrilling activities to try, and unforgettable experiences to join—one itinerary at a time.
