By Gemma Tedaldi | Published: 5 January 2024 | Updated: 23rd January 2026
Iceland may be well known for its capital, Reykjavík, but there are so many other wonderful villages and towns that are well worth a visit as well. After our second trip to Iceland, this time around the Route 1 Ring Road, we decided that there is no place in Iceland that isn’t beautiful! However, not everyone is as lucky as we are getting to enjoy so long in Iceland, so here are our top towns and villages in Iceland that you must visit on a country-wide trip (or over a few trips!) to Iceland:
📍 Grundarfjörður
📍 Hvammstangi
📍 Siglufjörður
📍 Dalvík
📍 Seyðisfjörður
📍 Djúpivogur
📍 Vík
Towns and Villages in Iceland You Must Visit Map
Towns and Villages in Iceland You Must Visit
1. Grundarfjörður
Situated in the west of Iceland, Grundarfjörður is a town with views that you will probably recognise even if you’ve never heard of it. Famous for appearing in numerous films and TV Shows (Game of Thrones being one), Grundarfjörður’s local mountain Kirkjufell is often called the most beautiful mountain in Iceland. The town itself is only small, with under 900 people living there, but it is one of the most peaceful and picturesque towns we visited. You can easily watch the sun go down and the stars come up on the beachfront with Kirkjufell towering over you.
2. Hvammstangi
Heading north from Grundarfjörður, the tiny village of Hvammstangi lies just off Route 1 on the Vatnsnes Peninsula. In an area known for its abundant wildlife and lighthouses, Hvammstangi may be small but it packs some incredible views and food! Keep an eye out for the local seals whilst walking along the coastline but if you don’t see any seals in the wild you can stop by the Seal Center in Hvammstangi instead.
3. Siglufjörður
Off the Ring Road and along Route 82 you come across the longest fjord in Iceland, Eyjafjörður, and the colourful fishing town of Siglufjörður. When we visited in the Spring there was still a fair amount of fluffy white snow on the ground, (and even falling as we left!), but it just makes you realise just how brightly coloured the town is! Siglufjörður is all about fishing first and foremost, so make sure you wander around the quaint harbour, visit the Herring Era Museum and enjoy the catch of the day in one of the many harbourside restaurants. You may also recognise parts of the town from the Icelandic TV drama Trapped, which is also linked with the next town on our list…
4. Dalvík
Most people choose to stay and explore around the capital of the North, Akureyri, but before you reach Akureyri, you reach the town of Dalvík, meaning ‘Valley Bay’. With its mountain background and port side views, Dalvík is a picturesque coastal town with great links for skiing, sea tours and hiking! There is something for everyone in every season, so take your pick! Be sure to hop in one of the local saunas / hot tubs on a cold day to warm you up with quite possibly the best views.
5. Seyðisfjörður
The furthest point east that we ventured and the most insane drive into a town we have ever done meant Seyðisfjörður has to go on the list of villages and towns you need to visit in Iceland! After leaving Route 1 ,we followed Route 93 up and over mountains with an altitude of 600 meters, so even in the summer and with sunshine, it is cold with a lot of fairly deep snow. But that’s not the best bit about the town, nor are the countless waterfalls you pass while coming into the town. It’s the artistic, mural-covered, sculpture-filled town centre, with a rainbow road and bright blue painted church that makes Seyðisfjörður extra special!
6. Djúpivogur
Djúpivogur is a small town, relatively unknown to tourists, that is situated along one of the southernmost points in the East Fjords of Iceland. Being surrounded by water this town is full to the brim with seabirds darting across the harbour and sunning themselves on the land. It is so famous for its numerous seabirds that the sculptor Sigurður Guðmundsson created a piece (or shall we say pieces), called Eggin í Gledivík to celebrate all 34 of the birds that nest in the area. It’s a wonderful sight to see, even more so as there is a delightful bright orange lighthouse just around the corner too!
7. Vík
One of the most well-known places on our list Vík is well worth a visit if you are just sticking to the south coast. With volcanic black sand beaches, crashing waterfalls and the famous puffin, the area in and around Vík is stunning. Although we’ve visited the town twice in different seasons we still found new things to discover. Even on a grey day, (which it quite often is in Vík!), the colourful town’s rooftops brighten the day and as long as you embrace the howling wind and pouring rain you can’t help but fall for Vík.
Where to stay in Iceland
All of the locations above have HI Iceland Hostels located nearby and we would highly recommend staying with them. We stayed in them throughout our time in Iceland and we couldn’t have wished for nicer accommodation.
Check out Hostelworld for the locations closest to where you want to base yourself or the map below for more accommodation options.
Towns and Villages in Iceland You Must Visit FAQs
How to get around Iceland
By far the best way, and often the only way, to get around Iceland is by car. If you want to go anywhere off the beaten path, there are extremely limited options if going via public transport, i.e. bus.
Car Hire in Iceland
We highly recommend hiring a car from Rentalcars.com for your trip to Iceland. We have used them to hire vehicles in multiple countries and they always get some of the best deals going.
What is the most beautiful small town in Iceland?
The most beautiful small town in Iceland has to be Seyðisfjörður. With its colourful houses surrounding the fjord, a quaint blue church, waterfalls at every turn and a rainbow road through the centre of the town. Seyðisfjörður is definitely somewhere worth visiting.
Is Húsavík a real town in Iceland?
Now, before anyone asks, following on from the highly popular film based in the location, Húsavík is indeed a real town in Iceland and is in fact the oldest settlement in Iceland. It is also known as the Whale Capital of Iceland, so if you want a chance to see some whale,s then Húsavík is the place to go!
How many villages and towns are there in Iceland?
There are over 100 towns and villages to be explored in Iceland, so be sure to not stick to just Reykjavík or the well known destinations but get out exploring other more remote locations too.
What is the smallest village in Iceland?
The smallest village in Iceland is Mjóifjördur, located in East Iceland, with under 10 people living there year round.
Iceland Tours
When visiting Iceland it can really pay off to hop on board a tour or two to see a whole other side of the country. Plus, you don’t have to do the driving!
Conclusion: Towns and Villages in Iceland You Must Visit
There you have it our towns and villages in Iceland you should visit. There are plenty more stunning locations across Iceland to visit, but these are the top ones you should make sure you get to. Be sure to check out our other Iceland posts for even more tips and suggestions.
Planning your own trip to Iceland? Be sure to download Wise by far the best currency conversion app around. We use it daily living on the border of two countries and it is a game changer when travelling!
This post has been produced in collaboration with HI Iceland. Although we were gifted the accommodation (and a few breakfasts!) during our time in Iceland, our opinion of HI Iceland and the individual hostels we stayed at is our own and has not been influenced.
Gemma Tedaldi
Gemma is the owner and author of The Travelling Tedaldi, a travel blog helping travellers to discover the best road trips and travel itineraries throughout the UK and Europe. When she isn’t writing about her favourite travel destinations, she can often be found out exploring local hikes or planning future trips.