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7 Charming Small Towns in Iceland You Must Visit Now

|September 16, 2019
Adelina loves time in the countryside, long walks in the forest, and late nights by the fire. She's a writer and journalist who believes there’s a story everywhere. You just need to find it.

Looking for new holiday adventures? Forget overcrowded cities with thick smog and long lines to the Eiffel Tower or Big Ben. Step off the touristy tracks and enjoy the old-world charm of Iceland’s small towns.

Looking for new holiday adventures? Forget overcrowded cities with thick smog and long lines to the Eiffel Tower or Big Ben. Step off the touristy tracks and enjoy the old-world charm of Iceland’s small towns.

Small town travel gives a behind the scenes look into local culture and customs. Spend your vacation in a cozy Icelandic town and experience the thrill of discovery. Villages in Iceland are charming, authentic, and unspoiled, unique in their own right, all waiting to be explored.

Prepare for your next adventure — explore small towns in Iceland

1. Vik (Vík í Mýrdal)

Vik is a seafront village settled in the shadow of Mýrdalsjökull Glacier, and the largest settlement in South Iceland. Small but cozy, Vik is the only village for at least 50 kilometers (30 mi) in each direction.

Beautiful town of Vik i Myrdal in Iceland

Close proximity to active volcanoes not only made Vik the only settlement in the area, but also shaped its unique landscape. Reynisfjara Black Sand Beach and Reynisdrangar Rocks are among the most famous attractions and perfect destinations for outdoor adventures around Vik. 

Around 300 people live in Vik. The town has coffee shops, family-run restaurants, and an outdoor swimming pool (almost every town in Iceland has one!). 

Where is Vik? Vik is located in South Iceland, right off the famous Ring Road. Vik is around 190 km (118 mi) away from Reykjavik, and it’s easy to access during all seasons.

Things to do in Vik: 

  • Take a picture in front of Reyniskirkja, the famous white church with a burgundy roof. 
  • Take a walk on Reynisfjara Black Sand Beach, rated as one of the most beautiful non-tropical beaches in the world! 
  • Visit an ice cave underneath the active Katla volcano.

2. Selfoss

Located on the banks of Ölfusá River, the town is the cultural hub of the region. The annual Summer in Selfoss (Sumar á Selfossi) Festival attracts music fans from all over Iceland. 

The largest residential town in South Iceland

Selfoss has nearly 7,000 residents all living within 2 km² (less than 1 mi²), meaning that all the cafés, restaurants, and bars are within arm’s reach!

Where is Selfoss? Selfoss is just under 60 km (37 mi) south of Reykjavik on Route 1.

Things to do in Selfoss:

  • Play nine holes of golf on the local course.
  • Try Bragðarefur — Iceland’s famous ice cream. More accurately, a generous heap of ice-cream, candy, fruit, and a sauce.
  • Take advantage of dark rural nights and catch a glimpse of the Northern Lights! 

3. Dalvik

Relatively young, Dalvik only became a village a century ago. Rich in herring, the waters around Dalvik attracted many fishermen who settled in town. A fast-growing village soon became one of the largest herring ports in the country. 

Dalvik in the North of Iceland

Every year, locals and visitors come together for The Great Fish Day, a festival that celebrates Dalvik’s golden days.

Dalvik is one of the best places for whale watching in Iceland. This route is lesser-known to tourists, though here you have the best chance to encounter the great humpback whale! If you’re lucky, you might even see a blue whale.

A ferry operates from Dalvik to Grimsey and the Hrísey Islands, sparsely populated regions with tons of unspoiled natural beauty. 

Where is Dalvík? The town is located on Tröllaskagi Peninsula in North Iceland, 410 km (255 mi) from Reykjavik and 45 km (28 mi) from Akureyri.

Things to do in Dalvik:

  • Hike the Svarfaðardalur Valley.
  • Visit for the annual Great Fish Day (Fiskidagurinn Mikli) and enjoy a free fish buffet!
  • Join a whale watching tour and sail through Eyjafjörður, one of the longest fjords in Iceland.

4. Isafjordur (Ísafjörður)

Isafjordur has around 2,600 residents and is the largest town on the Westfjords Peninsula. Originally a fishing village, in the past years Isafjordur has grown in the tourism industry.

Ísafjörður town in the Westfjords region

The town offers many outdoor activities from horse riding to kayaking and hiking. During summer months, catch a ferry to the Hornstrandir Nature Reserve, a refuge for local bird species and arctic foxes.

Isafjordur has a well-preserved, historic downtown that reflects the charming history of the 19th century. Full of stories and legends, Isafjordur is sure to intrigue and surprise visitors.

Where is Isafjordur? The town is 454 km (282 mi) from Reykjavik in the Westfjords of Iceland. 

Things to do in Isafjordur:

  • Take a ferry to the Hornstrandir Nature Reserve to enjoy pristine wilderness.
  • Party it up at the Ísafjörður Skiing Festival. The annual festival combines skiing and music to create a city break for families from all over the country and beyond. 
  • Get dirty at Swamp Soccer European Championship! Every year since 2004, a nearby town Bolungarvík holds a muddy, but fun soccer championship with bonfire and fireworks in the evening. 

5. Hofn (Höfn)

Hofn is surrounded by water on almost all sides. The town overlooks Iceland’s newest addition to UNESCO World Heritage List, Vatnajokull National Park

Hofn town

Rich in culture and history, Hofn is often a stop to tourists visiting attractions along the Ring Road. Some of the most famous nearby sights include Jokulsarlon Glacier Lagoon and the Diamond Beach

Hofn is home to around 2,000 people and one of the town’s main industries is fishing. The hamlet is famous for serving the best lobster in Iceland, and hosts an annual Lobster Festival every July!

Where is Hofn? Located in the southeastern part of Iceland near Hornafjörður Fjord, Hofn lies right by Vatnajokull National Park. The town is accessible through Route 1, and it’s 450 km (280 mi) away from Reykjavik.

Things to do in Hofn:

  • Visit the Gamlabúð Visitor Centre to learn all about the geology and culture of the region. Find out everything from the local effects of climate change to native birdlife facts.
  • Walk around the Hofn Harbor filled with colorful boats. Follow the walking path along the harbor and it will take you to a bird reserve. 
  • Travel to Vestrahorn Mountain on the Stokksnes Peninsula. Located on the opposite side of the bay, edgy Vestrahorn is one of the most dramatic landscapes in the country. Dubbed Iceland’s “Batman Mountain,” Vestrahorn does make you feel like you’re in a movie scene.

6. Grundarfjordur (Grundarfjörður)

Most famous for its neighboring mountain, Kirkjufell, Grundarfjordur has a lot to offer on its own. This charming town has a busy harbor with many cruise ships stopping for a visit. 

Grundarfjordur town

The town with around 1,000 residents has a number of restaurants, cafés, and unique shops. Guests can choose from hotels, hostels, guesthouses, and the Grundarfjordur camping site near a swimming pool.

Grundarfjordur is a short drive away from Snæfellsnes National Park that offers great sightseeing and hiking opportunities.

Where is Grundarfjordur? The town is situated in the north of the Snaefellsnes Peninsula in West Iceland. The town lies right at the bottom of Iceland’s famous mountain Kirkjufell, 180 km (110 mi) from Reykjavik.

Things to do in Grundarfjordur:

  • Walk the streets during the “Good Moment Town Festival” (Á góðri stund). Locals and town guests decorate their houses in the bright colors all throughout the annual family-friendly festival.
  • Visit the Viking Village in the town center. During summer, the local Viking Association builds an entire village dedicated to Vikings. Expect to see iron helmets, silver decorated swords, and wooden shields!
  • Take a picture of Mt. Kirkjufell, the most photographed mountain in Iceland! 

7. Seydisfjordur (Seyðisfjörður)

Seydisfjordur is a mountain town surrounded by Mt. Bjólfur (1,085 m / 3,560 ft) to the west and Mt. Strandartindur (1,010 m / 3,314 ft) to the east. 

Beautiful quaint artist town of Seydisfjordur

With around 700 inhabitants, Seydisfjordur has a vibrant cultural scene. The annual LungA Art Festival in mid-July has been running since 2000. 

The town has several waterfalls and the start of a popular hiking route, Tvísöngur Loop, is located in the center of downtown. In the wintertime, Seydisfjordur welcomes visitors at the nearby Stafdalur Ski Area that features trails for cross-country skiing and snowmobiling.

Where is Seydisfjordur? Seydisfjordur is located in East Iceland and can be reached by car via the Fjarðarheiði Mountain Pass. The town is 27 km (17 mi) off the Ring Road and 660 km (410 mi) from Reykjavik.

Things to do in Seydisfjordur:

  • Ski on East Fjord Mountains in Stafdalur Ski Area. The resort has a 1,600 m (5,250 ft) ski lift and ski lift for children, perfect for a family vacation.
  • Proud of its art scene, Seydisfjordur invites visitors to Skaftfell, the center for visual art. Skaftfell combines an exhibition space and a residential area for local artists. You will not only enjoy the artwork but also be able to meet the artists in person!
  • Hike one of the many trails that go through Seydisfjordur. You can even visit every one of the seven peaks surrounding the town. Become a “Seyðisfjörður Mountain Viking,” by collecting stamps at each of seven peaks. Will you accept the challenge to conquer them all in under 24 hours?

Each of the small towns in Iceland has its own character (and its own swimming pool). Whichever town you choose to visit, just remember to treat it with respect and the warm-hearted locals will make sure that you feel at home. One way to explore the small towns is in small groups. Discover our tours which have a limited number of people.

If you can’t wait to visit charming Icelandic towns, check out our award-winning, 6-day Ring Road adventure, the ultimate tour in Iceland!

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