🇮🇸 Iceland · Reykjavík and the southwest
Reykjavík is one of those capitals that surprise you with their human scale: despite being the centre of a whole country, it feels like a big, colourful, quiet town, looking out over the cold North Atlantic and ringed by mountains that on many days wake up snow-covered. It is the northernmost capital in the world, a city where in summer the sun barely sets and in winter the northern lights can appear above the roofs. Walking it is a pleasure: the streets of the centre are full of little corrugated iron houses painted in bright colours, murals, steaming cafés, bookshops and design stores.
Over the city reigns the unmistakable silhouette of Hallgrímskirkja, the Lutheran church whose concrete tower evokes the basalt columns of the Icelandic landscape and can be seen from almost anywhere. Below, beside the sea, the Harpa shines, the spectacular concert hall with its glass facade. In between beats a cultural life extremely intense for such a small city: museums, music festivals, a food scene that champions lamb, fish and Arctic produce, and a nightlife famous for its energy.
This guide covers the best of Reykjavík in a practical, friendly way: what to see in the city, how to use it as a base for Iceland's big excursions (the Golden Circle, the Blue Lagoon, the south coast, the northern lights), how to get around, where to sleep and eat, and how to make the most of a small but unforgettable capital, the gateway to one of the most astonishing countries on the planet.
According to the Icelandic sagas, Reykjavík was the first inhabited place in Iceland: around the year 874, the Norwegian settler Ingólfur Arnarson is said to have established himself in this bay and named it 'Reykjavík', meaning 'bay of smokes', after the columns of steam he saw rising from the area's geothermal springs. For centuries it was no more than a handful of farms. Only in the eighteenth century, driven by the official Skúli Magnússon — considered the 'father of Reykjavík' —, who set up wool workshops to modernise the economy, did the place begin to grow as a town. In 1786 it received the status of trading town. Over the nineteenth century it became the centre of the Icelandic independence movement against the Danish crown. In 1918 Iceland gained autonomy as a sovereign kingdom in union with Denmark, and on 17 June 1944, in the middle of the Second World War, the Republic of Iceland was proclaimed, with Reykjavík as capital. During the war the city was occupied first by British and then by American troops, which enormously accelerated its modernisation. In the post-war period, Reykjavík grew into a modern capital; in 1986 it made world news for the summit between Ronald Reagan and Mikhail Gorbachev, a landmark of the Cold War. The full story is on our history page.
Read the full history ↓The corner where it all began: this is where Ingólfur Arnarson landed around 874, where the Alþingi was founded at Þingvellir in 930, where the northernmost capital in the world grew up, and where today the geothermal heat of the Blue Lagoon and the volcanoes of the Reykjanes peninsula are still boiling.
Read the history of Reykjavík and the southwest →No exact prices: a scale from $ (budget) to $$$$$ (luxury), with 2-3 options per category.
Origins, formation and what the sources say.
The history of Reykjavík begins, according to Icelandic tradition, with the first permanent settlement on the whole island. The Landnámabók ('Book of Settlements'), a medieval chronicle of the colonisation of Iceland, tells how around the year 874 the Norwegian chieftain Ingólfur Arnarson established himself in this bay and became the country's first permanent Norse settler. Like many others, he was fleeing conflict and the growing power of King Harald of Norway.
The legend adds a lovely detail: on sighting land, Ingólfur is said to have thrown the wooden pillars of his high seat into the sea (the öndvegissúlur, sacred symbols of the home), swearing to settle wherever the waves took them. After searching for a while, his slaves found them washed up in a bay where columns of steam rose from the geothermal springs. Because of those 'smokes' — which were really the steam of the hot water underground — Ingólfur called the place Reykjavík: literally, 'the bay of smokes' (from reykur, 'smoke' or 'steam', and vík, 'bay').
For a very long time, however, Reykjavík was not a city or anything like one, but merely a group of scattered farms. Archaeological excavations right in the modern centre (now visible in the settlement museum, 'Reykjavík 871±2') have confirmed the existence of a Viking longhouse from that period, dated with remarkable precision thanks to the layers of volcanic ash in the ground. Real urban development would take almost a thousand years to arrive.
For almost nine hundred years, the place where Reykjavík now stands was no more than a handful of farms around Ingólfur's old estate. Iceland, then under Danish rule, was a poor rural country with no real cities. Change came in the eighteenth century through a key figure: Skúli Magnússon, a senior royal treasury official, now considered the 'father of Reykjavík'.
Around 1750, Skúli Magnússon promoted the creation of the so-called Innréttingar, a series of workshops and industries — mostly for processing wool — conceived to modernise Iceland's backward economy and give the country a manufacturing base. Those workshops were set up precisely in Reykjavík, around what is now Aðalstræti square, and attracted workers and a settled population. That was the seed of Iceland's first urban centre. Some of the oldest buildings still standing in the centre date from that pioneering period.
Formal recognition came soon after: in 1786, the Danish crown granted Reykjavík the status of trading town (kaupstaður), partly liberalising the trade that until then had been monopolised by Danish merchants. That date is considered the official birth of Reykjavík as a town, although at the time it had barely a couple of hundred inhabitants. From then on, slowly, the small town would begin to gather institutions and grow.
Over the nineteenth century, Reykjavík grew little by little and, above all, gained a new symbolic weight: it became the heart of the Icelandic national awakening and of the struggle for autonomy from Denmark. The small town came to hold the institutions that gave shape to a national identity, at a time when the whole of Europe was living through the rise of romantic nationalism.
A decisive milestone was the re-establishment of the Alþingi in Reykjavík. The Alþingi, founded back in the year 930 at Þingvellir, is one of the oldest parliaments in the world, but it had been dissolved in the early nineteenth century. In 1845 it was re-established as a consultative assembly, and its seat was fixed in Reykjavík, which reinforced the city's role as the country's political centre. The Alþingi building, on Austurvöllur square, is still the seat of Parliament today.
The figure who embodied this period was Jón Sigurðsson, leader of the Icelandic independence movement, whose statue now stands on Austurvöllur square opposite Parliament. Under his push, Iceland wrested concessions from the Danish crown, such as a first constitution and greater autonomy in its internal affairs around 1874, on the thousandth anniversary of the settlement. As its functions of government, education and culture grew, Reykjavík established itself as the natural capital of a nation demanding to govern itself.
The first half of the twentieth century brought two great leaps for Iceland and its capital. The first was political: in 1918, after decades of demands, Iceland gained recognition as the Kingdom of Iceland, a sovereign state in personal union with Denmark (that is, they shared a king, but Iceland governed itself). Reykjavík was already the undisputed capital of that kingdom.
The second leap came with the Second World War. In 1940, when Nazi Germany occupied Denmark, Iceland was cut off from the Danish crown. Because of its strategic position in the North Atlantic, British troops peacefully occupied the island in May 1940 to stop it falling into German hands; the following year, American troops took over. Although the occupation was not what Icelanders had chosen, it transformed Reykjavík at unprecedented speed: the building of bases, airfields (among them today's domestic airport) and infrastructure, along with the jobs and money the troops brought, modernised and enriched the city and pulled Iceland out of its economic backwardness.
With Denmark occupied and the union broken in practice, Icelanders took the final step. On 17 June 1944 — a date chosen because it was Jón Sigurðsson's birthday — at Þingvellir, the historic site of the old Alþingi, the fully independent Republic of Iceland was solemnly proclaimed, with Reykjavík as its capital. Sveinn Björnsson was the first president. That day, celebrated in the rain by a crowd, marked the birth of the modern country.
After independence, Reykjavík grew quickly into a modern capital, and today, together with its metropolitan area, it holds close to two thirds of the country's population. The Icelandic economy, traditionally based on fishing, diversified: the large-scale use of geothermal and hydroelectric energy — which heats the houses and the pools and supplies clean electricity — transformed quality of life and gave Reykjavík its profile as a clean, low-pollution city, despite the harsh climate.
The city gained unexpected world prominence in October 1986, when it hosted the historic summit between United States president Ronald Reagan and Soviet leader Mikhail Gorbachev. The meeting, held at Höfði house, an elegant wooden villa facing the sea, produced no immediate agreement, but many consider it a turning point that paved the way for the nuclear disarmament treaties and the end of the Cold War. Discreet, neutral Reykjavík was thus written into the great history of the twentieth century.
The last few decades brought light and shade. Iceland lived through a financial boom in the early twenty-first century that ended in a spectacular banking collapse during the global crisis of 2008, which hit Reykjavík hard (the unfinished Harpa hall stood as a symbol of those years). But the country recovered remarkably quickly, largely thanks to an explosion in tourism: Iceland's image as a destination of wild nature, glaciers, volcanoes and northern lights turned Reykjavík into the gateway for millions of travellers. Today it is a cosmopolitan, creative capital, devoted to design, music and culture, which keeps its small scale and its unmistakable character.