Bíldudalur is a pretty village on the shores of Arnarfjörður with a dark and scary secret: The Sea Monster Museum where the history of sea monster sightings in Icelandic history, folk culture and literature are revealed.

A disproportionate number of sea monsters have been spotted in and around Arnarfjörður, so keep an eye on the surface of the fjord as you leave town—are you sure that was just a seal dipping out of view? Arnarfjordur fjord is a large fjord in the Westfjords, almost thirty kilometers long and about 10 kilometers wide, at its widest point. 

The village prospered in the 19th century mostly thanks to booming fishery industry and some business enterprises. In the late 20th century and early 21st century the decline of fishing industry has led the town to diversy its economy. The village is now home to a factory, which processes algae found in Arnarfjordur fjord, and the village is also becoming a popular touris destination, especially for fishing trips and for artist seeking inspiration in the majestic scenery. 

Although the population of Bíldudalur is only about 200, music and culture has flourished there for decades. The village hosts an annual folk music festival with work-shops that guests can attend.