Planning a road trip in Iceland? Exploring different cities and towns is one of the best ways to experience the country’s landscapes, culture and everyday life.
Whether you’re driving the Ring Road, exploring the South Coast, or planning a self-drive itinerary, knowing which town to visit in Iceland can help you make the most of your trip.
From the capital city to remote fishing villages, each destination offers something completely different. Most of these places are easily accessible by car, making Iceland a perfect destination for a self-drive road trip.
Here are 12 of the best cities and towns in Iceland and how to visit them by car.
1. Reykjavik – The Capital of Iceland
Reykjavik is the heart of Iceland and the starting point for most travelers. It’s the largest city in the country and home to around two-thirds of Iceland’s population.
As the capital of Iceland, Reykjavík is where you find a mix of modern city life and Icelandic culture. From museums and galleries to cafés and restaurants, the city offers plenty to explore before heading out on a road trip.
- Hallgrimskirkja Church: This iconic structure is the largest church in Iceland and offers stunning views of the city from its tower.
- The National Museum of Iceland: Dive into Icelandic history and culture through fascinating exhibits and artifacts.
- Harpa Concert Hall: A modern architectural gem that hosts concerts, events, and offers breathtaking views of the harbor.
- Reykjavik Botanic Gardens: A peaceful oasis in the city, showcasing a variety of Icelandic and international plants.
- Blue Lagoon: While technically outside Reykjavik, this famous geothermal spa is a short drive away and offers a unique and relaxing experience.
Driving: From Keflavík International Airport, drive along Route 41 towards Reykjavík. The journey takes around 45 minutes and is straightforward, making it one of the easiest drives in Iceland.
2. Vík í Mýrdal – A Well-Known Town in the South
Vík is one of the most visited towns in Iceland, located along the South Coast. Despite its small size, it’s surrounded by some of the country’s most famous natural attractions, including:
- Reynisfjara Beach: Known for its dramatic black sand and towering basalt columns, this beach is a must-see. It offers breathtaking views of the Reynisdrangar sea stacks and the Dyrhólaey promontory.
- Mýrdalsjökull Glacier: This glacier, which covers the volcano Katla, is a short drive from Vík. Visitors can take guided tours to explore the glacier’s icy expanse.
- Skógafoss Waterfall: Just a 30-minute drive from Vík, this powerful waterfall is one of Iceland’s largest and most picturesque. Climb the stairs to the top for a stunning view.
- Vík Church: Perched on a hill overlooking the town, the charming church offers panoramic views of the area and is a great spot for photos.
In addition to these attractions, Vík is a great base for exploring the South Coast of Iceland, one of the most popular regions for a self-drive trip. The town itself is cozy and welcoming, with several guesthouses, restaurants, and shops catering to visitors.
Driving: From Reykjavík, follow Route 1 (the Ring Road) south. The drive takes about 2.5 hours and is one of the most scenic routes in Iceland, with waterfalls and coastal views along the way.
3. Höfn – The Lobster Town
Höfn is a small fishing town in Southeast Iceland, best known for its connection to Vatnajökull National Park. This area is home to glaciers, ice caves, and the famous Jökulsárlón glacier lagoon nearby. Höfn is also known for its seafood, especially lobster.
Höfn is surrounded by some of the most dramatic landscapes in Iceland, making it a popular stop for travelers driving the Ring Road.
- Vatnajökull National Park: Höfn is the gateway to Vatnajökull National Park, home to the largest glacier in Europe. Visitors can take guided tours to explore the glacier’s stunning ice formations and caves.
- Vestrahorn Mountain: Often called “Batman Mountain,” Vestrahorn is a dramatic peak located near Höfn. It offers fantastic photo opportunities, especially at sunset when the light illuminates the mountain.
- Hoffell Hot Tubs: Just a short drive from Höfn, these natural hot tubs offer a relaxing way to enjoy the geothermal activity of the region while soaking in the stunning views.
- Höfn Lobster Festival: Celebrated annually, this festival is a treat for seafood lovers, showcasing the town’s famous lobster dishes and local culture.
The town also features a picturesque harbor and view of nearby glaciers and mountains. With a range of restaurants, guesthouses, and shops, Höfn is a comfortable and convenient stop on a Southeast Iceland road trip.
Driving: From Reykjavík, continue along Route 1 east past Vík and Jökulsárlón glacier lagoon. The drive takes around 5 hours without stops, but most travelers split it over 1-2 days.
4. Egilsstaðir – The Largest Town in East Iceland
Egilsstaðir is the largest town in East Iceland, serving as the region’s main service and transportation hub. Established in 1947, it has grown steadily and now has a population of around 2,500 residents. Located on the banks of the Lagarfljót river, it’s a convenient base for exploring the scenic Eastfjords.
Surrounded by forests, lakes, and mountains, this area offers a different landscape compared to other parts of Iceland and is a key stop on an East Iceland road trip.
- Lagarfljót Lake: Home to Iceland’s legendary lake monster, Lagarfljótsormurinn, this lake is perfect for boating and fishing. The surrounding area is also ideal for hiking.
- Hallormsstaðaskógur Forest: Iceland’s largest forest, located near Egilsstaðir, offers numerous hiking trails, picnic areas, and camping spots.
- Vök Baths: These geothermal floating pools on Lake Urriðavatn provide a unique and relaxing experience, with views over the surrounding landscape.
- Seyðisfjörður: A short drive away, this picturesque village is known for its vibrant arts scene and colorful wooden buildings. It is also the port for the Smyril Line ferry from Europe.
- Hengifoss Waterfall: One of Iceland’s tallest waterfalls, located nearby, offers a scenic hike and striking views.
Egilsstaðir also offers a variety of amenities, including swimming pools, golf courses, shops, restaurants, and hotels, making it a convenient and comfortable stop in East Iceland.
Driving: From Reykjavík, follow Route 1 north and then east along the Ring Road. The journey takes around 8 hours and includes mountain passes and fjord views, especially as you approach East Iceland.
5. Akureyri – The Capital of the North
Akureyri, often referred to as the “Capital of the North,” is Iceland’s second-largest urban area, located just 100 km south of the Arctic Circle. With a population of around 19,000 residents, it has developed into a lively cultural and economic hub in North Iceland.
Set at the base of a fjord, Akureyri is a popular stop on a North Iceland road trip and a key destination along the Ring Road.
- Goðafoss Waterfall: Located just a short drive from Akureyri, this powerful waterfall is one of Iceland’s most well-known natural attractions.
- Akureyri Botanic Gardens: Established in 1912, these gardens feature a wide collection of Icelandic and international plant species, offering a quiet break in the center of town.
- Mývatn Nature Baths: Often referred to as the “Blue Lagoon of the North,” these geothermal baths provide a relaxing experience with stunning views of the surrounding landscape.
- Akureyri Art Museum: Showcasing contemporary Icelandic art, this museum adds to the town’s strong cultural scene.
- Whale Watching: Akureyri is a great base for whale watching tours, especially during the summer months when humpback whales are commonly seen.
- Historic Buildings: Explore the old town area with its well-preserved wooden houses and historical sites.
Akureyri also offers a range of restaurants, cafés, and local shops, making it a comfortable and well-equipped stop when traveling through North Iceland.
Driving: From Reykjavík, take Route 1 north through Borgarnes and across North Iceland. The drive takes around 4.5 to 5 hours and is fully paved, with several good stops along the way.
6. Húsavík – The Whale Watching Capital of Europe
Húsavik is a charming harbor town located on the north coast of Iceland, widely known as the whale watching capital of Europe. With a population of around 2,300 residents, it has a strong maritime history and is one of the best places for whale watching in Iceland.
Located in North Iceland, Húsavík is a popular stop for travelers exploring the region and looking to experience wildlife and coastal landscapes.
- Whale Watching Tours: Húsavík offers some of the best whale watching tours in Europe. During the summer months, visitors can see humpback whales, minke whales, blue whales, and various dolphin and porpoise species.
- Húsavík Whale Museum: This museum provides insights into marine life and the history of whale watching in Húsavík, making it a worthwhile stop in town.
- Geosea Geothermal Sea Baths: These sea baths offer a relaxing experience with views over Skjálfandi Bay. The warm, mineral-rich seawater is perfect for soaking and unwinding after a day of exploring.
- Húsavíkurkirkja Church: This wooden church, built in 1907, is one of the town’s most recognizable landmarks.
- Puffin Island: A short boat trip from Húsavik, this island is home to a large colony of puffins and is a great spot for bird watching.
The town also has a selection of cafés, restaurants, and guesthouses, making it a comfortable stop when traveling through North Iceland.
Driving: From Reykjavík, follow Route 1 north, towards Akureyri, then continue east and turn onto Route 85 towards Húsavík. The journey takes around 5.5 to 6 hours.
7. Ísafjörður – A Charming Fishing Village
Located in the Westfjords region, Ísafjörður is a picturesque fishing village surrounded by steep mountains and fjords. With a population of around 2,600 residents, it is the largest town in the Westfjords and serves as a regional hub. Settled in the 9th century, it has a long history as a trading post and fishing center.
Set in one of the most remote regions of Iceland, Ísafjörður is a great destination for travelers looking to explore the Westfjords and experience a quieter, less crowded side of the country.
- Westfjords Heritage Museum: This museum highlights the maritime history of the Westfjords, with exhibits on fishing, boat building, and everyday life in the region.
- Hornstrandir Nature Reserve: Accessible by boat from Ísafjörður, this remote nature reserve offers excellent hiking opportunities and the chance to see Arctic foxes and birdlife.
- Tjöruhúsið Restaurant: Located in one of the oldest buildings in town, this restaurant is known for its fresh seafood and Icelandic dishes.
- Music and Cultural Festivals: Ísafjörður hosts several annual events, including the Aldrei fór ég suður music festival.
- Historic Buildings: Walk through the town and explore well-preserved wooden houses, dating back to the 18th century.
- Outdoor Activities: The surrounding landscape offers excellent opportunities for hiking and kayaking in the summer, while skiing is popular during the winter months.
Driving: From Reykjavík, take Route 1 north, then turn onto Route 60 and continue through the Westfjords via Route 61. The drive takes around 6 hours or more, depending on road conditions and stops.
8. Borgarnes – Gateway to Snæfellsjökull National Park
Borgarnes is a small town located on a peninsula at the Borgarfjörður fjord. With a population of around 2,000, it is an important historical area linked to early settlement in Iceland. The town is best known for the Settlement Center, which offers insights into Icelandic history and the Viking age.
Borgarnes is also a key stop when heading towards the Snæfellsnes Peninsula and Snæfellsjökull National Park, home to the Snæfellsjökull glacier and volcano. Its location makes it a convenient place to pause before continuing into West Iceland.
Driving: From Reykjavík, follow Route 1 north. Borgarnes is just over an hour away, making it an easy and convenient first stop on a road trip.
9. Vestmannaeyjar (Westman Islands) – The Largest Island
Vestmannaeyjar is an archipelago off the south coast of Iceland, with Heimaey being the largest island in the Vestmannaeyjar group. The town is known for its volcanic history, notably the 1973 eruption of Eldfell, which led to the evacuation of the island’s residents.
Today, it’s famous for its large puffin colonies in summer, dramatic coastal cliffs, and scenic hiking routes, including the climb up Eldfell volcano for panoramic views of the island.
Driving: From Reykjavík, drive along Route 1 south to Landeyjahöfn harbour (around 2 hours), then take the ferry to Vestmannaeyjar. The ferry crossing takes about 35 minutes and runs daily, although schedules can vary depending on weather conditions.
10. Hveragerði – The Hot Spring Town
Hveragerði is known for its geothermal activity, earning it the nickname “the hot spring town.” Located about 45 km east of Reykjavik, this small town sits in an active geothermal area with steam vents, hot springs, and bubbling mud pools.
One of the main highlights is the Reykjadalur valley, where you can hike to a naturally warm river and bathe in the surrounding landscape. The town is also home to a geothermal park, where you can see boiling mud pots and learn more about Iceland’s volcanic activity.
Hveragerði is a popular and easy day trip from Reykjavík, especially for those looking to experience geothermal nature without traveling far.
Driving: From Reykjavík, take Route 1 east. The drive takes around 40 minutes on a fully paved road and is one of the shortest and easiest trips from the capital.
11. Dalvík – A Scenic Fishing Village
Dalvík, located on the Tröllaskagi Peninsula in North Iceland, is a small fishing village known for its coastal views and relaxed atmosphere. With a population of around 1,400, it offers a quieter alternative to nearby Akureyri while still being close to many northern highlights.
The town is a popular spot for whale watching, especially during the summer months, and is also known for its annual Great Fish Day festival, where visitors can sample local seafood and experience the town’s strong fishing culture. Dalvík is also associated with traditional Icelandic dairy production, including skyr.
Surrounded by mountains and fjords, it’s a great place to slow down and experience a different side of North Iceland.
Driving: From Reykjavík, follow Route 1 north towards Akureyri, then take Route 82 north to Dalvík. The drive takes around 5 hours and includes scenic coastal views in the north.
12. Seyðisfjörður – The Artistic Haven
Seyðisfjörður, located in the Eastfjords, is known for its vibrant arts scene and beautifully preserved wooden buildings. With a population of around 700, it offers a mix of art, history and scenic surroundings.
The town is home to several art spaces, including the Skaftfell Center for Visual Art, and is known for its colorful streets, including the well-known rainbow street leading up to the local church. Seyðisfjörður is also the port for the Smyril Line ferry from Europe, making it a key entry point for some arriving in Iceland.
Set at the end of a narrow fjord and surrounded by steep mountains, it’s one of the most picturesque towns in East Iceland.
Driving: From Reykjavík, follow Route 1 east towards Egilsstaðir, then take Route 93 over a mountain pass to Seyðisfjörður. The journey takes around 8 hours in total. The final stretch includes steep and winding roads, so conditions can vary in winter. A 4×4 can be helpful in colder months, but the route is accessible in summer with a standard vehicle.
Explore Iceland by Car with Firefly
Exploring Iceland by car is the easiest way to see more of the country, especially when towns and attractions are spread across long distances. A self-drive trip gives you the flexibility to stop whenever you want, take detours, and travel at your own pace.
At Firefly Iceland, we offer cheap rental cars in Iceland that make it simple to plan your trip, whether you’re driving the South Coast, exploring the Ring Road, or heading further into places like the Eastfjords or Westfjords.
Choose a car that fits your route and travel style, and start your Iceland road trip with confidence.
FAQ – Cities and Towns in Iceland
- How many cities are there in Iceland?
Iceland has only one official city, Reykjavík. All other populated places, such as Akureyri or Höfn, are classified as towns, even if they function as major hubs for their region.
- What is the best way to visit towns in Iceland?
The best way is by renting a car. Public transport is limited outside Reykjavík, so a self-drive trip gives you the most flexibility.
- Can you drive to all towns in Iceland?
Most towns are accessible via the Ring Road or main routes, but some areas like the Westfjords require longer drives and careful planning.
- Do you need a 4×4 to visit towns in Iceland?
- What is the most visited town in Iceland?
Vík is one of the most visited towns due to its location on the South Coast and proximity to major attractions.
Conclusion
Iceland may be a small country, but its cities and towns offer a wide range of experiences, from vibrant urban life in Reykjavík to remote coastal villages like Ísafjörður and scenic fjord towns such as Seyðisfjörður. Each destination adds something different to your trip, whether it’s culture, nature, wildlife, or simply a place to pause and take in the landscape.
The key to making the most of your trip is flexibility. With a rental car, you’re not limited by schedules or fixed routes. You can take your time, stop along the way, and explore beyond the main attractions. Whether you’re driving the South Coast, completing the Ring Road, or heading into quieter regions like the Westfjords, having your own car makes the journey smoother and more enjoyable.
No matter the route you choose, these towns give you a deeper look into Iceland beyond just the famous sights. Plan your route based on the time you have, choose the right car for the season, and enjoy the freedom of exploring Iceland on your own terms.
