The Icelandic coastline is dotted with charming towns and villages that are often a little off the beaten path and are therefore able to retain their unique charm and slow-paced lifestyle. These towns are little gems that can be easy to miss amidst all the spectacular natural scenery Iceland has to offer, but are all worth a visit for those who want to get a deeper connection to the soul of the country. In order to make sure you don’t miss out, we’ve compiled a list of 8 small towns in Iceland you might not have heard about.


Siglufjordur is Iceland’s most northerly town with a population of around 1200, located in a narrow fjord on the north coast. The so-called “herring adventure” that started in 1900 when Norwegian fishermen started fishing for herring outside of Iceland, had a great impact on a lot of small towns on the north and east coast, but nowhere was that impact as great as in Siglufjörður. Within forty years the town’s population had surged to 3000 and it had become one of the most important ports in Iceland, earning it the nickname the “Atlantic Klondike”. The herring adventure ended in 1969 but the Herring Museum that was opened in 1994 in an old salting station has several exhibitions dedicated to the era. In summer there are plenty of stunning hiking trails in the surrounding mountains, you can go sea angling in the river Hólsá, and during the first week of July there’s a Folk Music Festival where artists from all over the world come together. The winter offers great skiing opportunities, with heli-skiing becoming increasingly popular in the recent years for those with an adventurous streak.


Hólmavík is the largest town in the Strandir area in the Westfjords. It has a population of around around 400. Holmavik’s main attraction is the Museum of Icelandic Sorcery & Witchcraft. In the 17th century, just as the witch hunts in Europe were dwindling, accusations of witchcraft and sorcery started surfacing in Iceland. The museum has exhibitions on that period where you can see various magical staves and the only intact pair of necropants (Death pants) in the world. If you’re feeling hungry after that experience the museum has a restaurant that serves traditional Icelandic food as well as some vegetarian dishes. The Sævangur Sheep Farming Museum is a fun and educational experience for the whole family, as there are play rooms for the children, a science room where you can look at various things through a microscope and best of all, the museum lambs that guests can feed milk from a bottle.


A small town of about 700 inhabitants located in a fjord of the same name in the East of Iceland. It is thought to have been one of the earliest settlements in Iceland with graves being found there that date back to the 7th century. It was later settled by Norwegian sailors who built many of the houses that still stand today, lending the town its distinctive look. The most famous of these houses is the picturesque blue church, the site of many concerts during summer. In fact, Seyðisfjörður has become a bit of an artists’ colony, with an arts festival, LungA, for young people held there every summer. Along with the arts centre there’s a technical museum in town and the Dieter Roth Academy is located close by. The world famous artist lived in Seyðisfjörður for towards the end of his life. For those more outdoorsy there are plenty of activities available, like sea angling, skiing, diving, para-gliding and of course there’s a colony of puffins near the town for the bird enthusiasts.


Fans of the Ben Stiller film The Secret Life of Walter Mitty will recognise the quaint town of Stykkishólmur on the Snæfellsnes peninsula. With just over a 1000 inhabitants the town’s main business is fishing. The natural harbour the town is built around is the reason it became one of the country’s main trading posts in the 1500’s. Today there’s plenty to see and do for visitors. One of the main attractions is the former town library, known as the Library of Water, designed by famous artist Roni Horn. The building now houses three exhibitions by Horn; Water, Words and Weather Reports, as well as a writer’s residency. Other attractions include the volcano museum and The Norwegian House, built by trader Árni Thorlacius in 1828 that now houses a regional museum. Stykkishólmur is also the gateway to Breiðafjörður bay and its thousands of small islands.

Flatey Island

One of the islands in Breiðafjörður is Flatey, the largest of a cluster of about 40 islands. The whole island is only about 2 kilometers long and about one kilometre wide, which means that you can walk around the whole island in around an hour. During winter the island is populated by only two farmers, but during summer the population goes up due to second home owners, tourists and the staff of the only hotel on the island. There’s one road on the island leading from the dock to the so-called „old village“. The main inhabitants of the island are certainly not people, but sheep and puffins that will delight nature loving visitors. Flatey is the home of Iceland’s oldest library, once home to the medieval manuscript Flateyjarbók. The local church is also well worth a visit for its altar piece. The piece was painted by the famous painter Baltasar Samper, father of director Baltasar Kormákur, who is featured in the piece as a “Lopapeysa”-clad Jesus.


A small fishing village on the south coast, Eyrarbakki has just over 570 residents. Like many other small towns in Iceland Eyrarbakki was originally a trading post but once the nearby river Ölfusá was bridged the harbour fell into disuse. Eyrabakki has managed to preserve its old street-view down by the harbour and it lends the town an old-timey feel, that’s supremely charming. Every April they host the free folk-music festival Bakkinn where artist from all over the country appear. The church, built in 1890, is also of note as its altar piece was painted by Queen Louise of Denmark. Eyrarbakki also boasts of the oldest timber houses in the country, a Norwegian kit house known as simply The House, built in 1765. The House is home to the local history museum. The Flói bird sanctuary is close to Eyrarbakki and the town has a couple of excellent seafood restaurants.

Borgarfjörður Eystri

Home to a large puffin colony but only around 100 people. This small town in East Iceland has strong connections to elf lore, as the queen of the elves is said to live in Álfaborg, the 30 m tall hill the town is named after. Several places in the area are said to have connections to elves and you can go hiking up to them, just be careful not to disturb anything so you don’t incur the elves’ wrath. Borgarfjordur Eystri is also know for the popular music festival Bræðslan that takes place every summer and has seen world famous artists such as Damien Rice and Belle & Sebastian play, along with up and coming Icelandic bands. The festival attracts up to 2000 people each year, making the town come alive with music lovers. Iceland’s most famous painter Jóhannes S. Kjarval grew up in the area and there’s a museum, Kjarvalsstofa, dedicated to him in the town. Kjarval also painted the altar piece for the church that the local bishop famously refused to bless, due to its depiction of Christ on the cross next to an elf hill.

Grímsey Island

Another small island with very few inhabitants (just over 80) Grímsey is the northernmost inhabited place in Iceland. It is home to over a million birds so be prepared to feel outnumbered. The villagers collect the eggs from the birds’ nest on the steep cliffs all over the island. The Arctic Circle runs through the island and during solstice the sun stays either up or down for 24 hours. Every September the island hosts the Arctic Run, the only running event in the world where you run around a whole island and cross the Arctic Circle. The island’s inhabitants are also keen golfers and the 3 hole golf course offers visitors the chance to play golf in the Midnight Sun. Unusually for Iceland, the island has no natural resources providing hot water and electricity, those are provided by a diesel aggregator. In the 70’s a windmill was built on the island but that experiment failed when the mill broke down shortly after being built. Its remains can still be seen on the southwest part of the island.

Aslaug Torfadottir

Aslaug writes scripts and plays and does copious amounts of research by watching hours upon hours of Netflix and visiting the local theaters and restaurants. Her favorite spot in Iceland is Skardsvik beach on the Snaefellsnes Peninsula, with Husavik village a close second. Her favorite Icelandic saying is „Þetta reddast“ – roughly translated as „Eh…it‘ll be fine.“