6 towns to visit in Iceland

One of the most charming things in Iceland isn’t only its dramatic landscape, but also its colorful, creative architecture. When these cute houses gather into a tiny village against dramatic fjords, it genuinely feels like something out of a fairytale! If you are planning an epic road trip, here are my 6 favorite towns to visit in Iceland across the south and west.

1. Fossatun

Fossatun is a quiet countryside stop in West Iceland along Route 50, surrounded by folklore and rolling scenery. The real charm here is the landscape and the fantastic sights right on its doorstep.

Attractions :

• Lava Waterfall (Hraunfossar): For me, this is my absolute favorite waterfall in Iceland. It might not be the most massive, but clear spring water pouring directly out of the lava field is pure natural art!

• Children’s Waterfall (Barnafoss): Located right next to Hraunfossar, with turbulent rapids carving through narrow rock formations.
• Troll Waterfall (Trollafossar): It sits directly next to my stay at the Fossatun Guesthouse! Personally, I consider this accommodation a wonderful attraction in its own right, complete with troll story trails to roam around.

• Deildartunguhver hot spring: Europe’s most powerful hot spring, billowing steam across the valley.
• Reykholt: A historic cultural hamlet nearby, known for its rich saga history and geothermal baths.
• Borgarnes: A lively coastal town just down the road with more than 1,000 inhabitants and great bakery stops.

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2. Höfn

Höfn is a charming fishing port in southeast Iceland right along the Ring Road (Route 1), renowned as the lobster capital of the country! You simply cannot leave without tasting the local langoustines at one of its remarkable harbour restaurants.

Attractions:

• Jökulsárlón glacier lagoon: Floating icebergs drifting toward Diamond Beach, easily reached just an hour’s drive west along Route 1.

Restaurants:

• Humarhofnin: The go-to spot for gourmet langoustine dishes in Höfn. It is a splurge, but worth every single bite!

• Pakkhus restaurant: Located in a historic warehouse overlooking the harbour, this local favorite serves incredible langoustine. It operates year-round, closing only for a short winter break from early December through late January or early February.
• Nyhofn Nordic Bistro: Set in Höfn’s oldest family house dating back to 1897, this dining spot has unfortunately closed its doors permanently.

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3. Stykkishólmur

Perched on the northern coast of the Snæfellsnes Peninsula, Stykkishólmur is easily one of the prettiest small towns in Iceland. With well-preserved wooden houses, cozy cafes, and panoramic views over Breiðafjörður, it makes a dreamy overnight base.

 

Attractions:

• Kirkjufell: Iceland’s iconic arrowhead mountain, rising dramatically above the fjord.
• Kirkjufellsfoss: The photogenic waterfall sitting directly opposite Kirkjufell.
• Kolgrafafjordur bridge: A scenic causeway where you can often spot seals and even killer whales feeding in the bay.

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4. Grundarfjörður

If you want the ultimate front-row seat to Mount Kirkjufell, Grundarfjörður is the small fishing town where you should set up your tripod. I loved strolling around its quiet streets and admiring the colorful local homes beneath towering mountain peaks.

 

Attractions:

• Kirkjufell: The landmark peak towering over the edge of town, perfect for chasing the northern lights in winter!

• Kirkjufellsfoss: The multi-tiered cascade framing Kirkjufell in the background.
• Kolgrafafjordur bridge: A fantastic marine-wildlife viewing spot along the peninsula road.
• Ólafsvík: A neighbouring fishing village nearby featuring a striking, triangular modern church.

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5. Vík

Vík í Mýrdal is the quintessential hub among towns to visit in South Iceland, perfectly positioned right off the Ring Road. While the settlement itself is small, it serves as the ultimate base camp for discovering world-famous coastlines and glaciers.

Attractions:

• Skógafoss waterfall: One of the biggest and most majestic waterfalls in Iceland, throwing up glorious rainbows on sunny days.
• Seljalandsfoss waterfall: The unique cascade where you can actually walk right behind the curtain of falling water.
• Dyrhólaey: A soaring coastal promontory offering breathtaking cliff views and puffin nesting grounds during the summer months.

• Reynisfjara beach: The world-famous black sand beach showcasing dramatic sea stacks and towering basalt columns.

• Svartifoss waterfall: The striking waterfall framed by dark hexagonal basalt columns, situated farther east in Skaftafell.

 

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6. Hellnar

Tucked at the far western tip of the Snæfellsnes Peninsula, Hellnar is an ancient fishing hamlet with wild coastal scenery that completely hypnotized me. The cliffside paths look out over crashing North Atlantic waves, and the cluster of traditional black wooden cottages feels like stepping back in time!

Attractions:

• Ytritunga beach: A golden-sand beach along the southern peninsula shore, famous as one of the best places to watch wild seals lounging on the rocks.

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