While towering skyscrapers and bustling cities are seriously impressive, nothing quite speaks to my heart like the charming little towns of Iceland!
The incredibly beautiful landscapes sprinkled with colorful houses brighten even the cloudiest day.
Now, I know there are plenty of misconceptions about villages that might make visitors skip them when planning their trip, like:
There’s nothing to do…
You’ve seen one, you’ve seen them all…
They don’t have good food…
But au contraire!
The towns I’m about to share with you are some of Iceland’s best-kept secrets.
Real hidden gems that deserve a spot on your itinerary.
You’ll find geothermal bakeries, live music festivals, world-class seafood, and scenic hikes you won’t believe are real.
If you’re putting together your itinerary and curious about the dreamy towns in Iceland that most tourists zoom right by, then this post is for you!
Let’s get into it!
Table of Contents:
- Towns in South Iceland
- Fairytale Towns in East Iceland
- North Iceland Towns
- Towns in Iceland: The Westfjörds
- West Iceland + Snæfellsnes Peninsula
- Well-Known Towns in Iceland Worth Mentioning
- Discover Towns in Iceland with My Guidebooks + Maps
Towns in South Iceland
This popular region still has a few quiet towns that aren’t as frequently visited by tourists. Let’s find out what they are!
Hveragerði in South Iceland
Also known as the ‘flower village,’ Hveragerði stands out for its geothermal activity and lush greenhouses.
Hveragerði Geothermal Park is definitely the highlight of the area.
One of the coolest things they do here is bake bread using geothermal heat!
It’s called hverabrauð, and yes, it’s delicious!
Would you like to learn more about the real Iceland, beyond the usual tourist hotspots?
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Vestmannaeyjar (The Westman Islands)
The Westman Islands still feel like a secret to many visitors, despite their rich history and puffin colonies.
They’re a favorite weekend getaway for locals, and honestly, it’s time you got in on the action! 😉
Ever wonder what the South Coast is like in winter? Find out below.👇
Fairytale Towns in East Iceland
This region is one of Iceland’s best-kept secrets.
If it’s hidden gems, enchanting towns, and fewer crowds you’re after, then don’t overlook East Iceland!
Seyðisfjörður
If I had to pick just one small town in Iceland to gush about, it would be Seyðisfjörður…hands down!
Positioned at the bottom of a fjord, surrounded by mountains, and only twenty minutes off the Ring Road, this place is storybook adorable.
You’ll probably recognize it from photos of the Rainbow Road leading up to Seyðisfjarðarkirkja, the pastel-blue church.
The town itself is full of character, with colorful wooden houses, cozy cafés, and a vibrant art scene.
Seyðisfjörður also made its mark on the big screen with The Secret Life of Walter Mitty. Remember that epic skateboard scene?
Yep, filmed right here.
Just keep in mind: the mountain pass that leads into town is often closed off or difficult to drive through until summer.
But if you’re visiting during the warmer months, it’s an absolute gem in East Iceland and well worth staying the night.
Want to find out more about what makes this one of the best small towns in Iceland? Take a look at this tour.👇
➡️ TAKE A TOUR: East Iceland Nature and Culture – Seyðisfjörður
Towns in Iceland: Höfn
This little Southeast fishing town is known as the Langoustine capital of the world!
Every July, there’s a lobster festival called Humarhátíð where you can expect delicious food and live music.
Fun things to do in the area include visiting the Hoffell Hot Tubs, Skaftafell National Park, and Vatnajökull Glacier.
If you’re visiting Jökulsárlón Glacier Lagoon, Höfn is the easiest place to spend the night.
Looking for a bit of adventure? Check out this ice cave and glacier hike tour.👇
➡️ TAKE A TOUR: Into the Glacier – Glacier Hike and Ice Cave Tour, Iceland
North Iceland Towns
If I were to define North Iceland, it would be by its stark contrasts. You’ll find volcanic craters and mud pools, gushing waterfalls and underground caves filled with blue geothermal water. It’s a landscape full of surprises.
While Akureyri (the capital of the north) adds a lively city vibe, you’ll also find some spectacular villages in Iceland between the wild landscapes.
Siglufjörður
Bring on the dramatic fjord views!
Located on the Tröllaskagi Peninsula, this tiny fishing village was the herring fishing capital of Iceland and still manages to charm visitors with its rich history and adorable wooden houses.
If you love museums, it’s also home to the award-winning Herring Era Museum.
Want to learn more about Siglufjörður and visit the museum? Have a peek at this walking tour.👇
➡️ TAKE A TOUR: Sigló Stroll
Húsavík, Iceland
I can’t say enough good things about this little town.
When my husband and I first visited Iceland on our honeymoon, many moons ago, it was right here that we looked at each other and said, “Let’s move to Iceland.”
Despite it being one of the major sites in the area, it’s not as crowded as Reykjavík or Akureyri.
Known as the whale watching capital of Iceland, Húsavík offers some of the best chances to see whales up close in their natural environment.
But don’t stop there, you can also relax in the Geosea hot springs, explore Goðafoss waterfall, or take a trip to the nearby Mývatn area.
Take a sneak peek at Húsavík and a couple of detours off the Ring Road here.👇
Towns in Iceland: The Westfjörds
The Westfjörds is one of my favorite regions in the whole country!
Despite it being so remote, it’s been recognized by travel experts as one of the top regions in Iceland to visit.
I’m a sucker for waterfalls, hiking trails and pretty little villages and the Westfjörds have them all!
Take a look.👇
Ísafjörður
With a population of around 2,600, Ísafjörður is the largest town in the Westfjörds – though still endearingly small.
It’s quiet, full of history and natural beauty, with colorful wooden houses that pop against the stunning natural backdrop.
If you’re visiting during Easter in Iceland, this town hosts a local music festival called Aldrei Fór Ég Suður (I Never Went South).
Expect singing, dancing, and everyone coming together to celebrate.
Pro tip: While you’re in town, don’t miss Tjöruhúsið. It’s famous for being the best seafood restaurant in Iceland!
Ísafjörður is also a great place to spend the night if you’re visiting this remote region.
Two more towns in Iceland to consider visiting in this area are Flateyri and Patreksfjörður.
West Iceland + Snæfellsnes Peninsula
Just a short drive from Reykjavík, West Iceland and the Snæfellsnes Peninsula pack in some of the country’s most memorable sights and experiences.
Borgarnes
This little town in Iceland is only 47 miles (75km) from the capital and is often overlooked by travelers rushing through to the west.
It’s a great stop if you’re looking for a mix of nature, history, and good food!
You can check out the Settlement Centre and Egils Saga Exhibition, explore some hiking trails, or just relax in the parks and local swimming pool.
Plus, there are cute shops, tasty restaurants, and a handy campsite (Granastaðir) nearby.
Want more West Iceland gems?
I’ve included all my favorite spots, well-known highlights and lesser-known stops, in my 👉 West + South Iceland Map + Guidebook.
It’s super helpful if you’re exploring the area and want a little help knowing where to go.
It even comes with a handy digital map!
You’ll find accommodation, campsites, restaurants, regional highlights, and so much more.
Take a look at what Janet had to say about it:
Thank you soooo much for your West + South Map. It was so helpful during our trip. It was so nice as we were traveling to be able to tell the kids, “yes, there’s a bathroom there” or “yes, we can get food soon” or “yes, we can go to another hot springs” because all the information was there and easy to access. It made the driving portion of our trip stress-free! We absolutely loved Iceland and hope to go back again someday and see more!
Make planning your trip easy and get your 👉 West + South Iceland Map + Guidebook today.
Stykkishólmur
Another personal favorite of mine is Stykkishólmur. This lovely town has colorful houses and an iconic orange lighthouse.
I suggest taking a walk up Súgandisey Cliff for some amazing views.
Great restaurants seem to be a common thread in these Icelandic towns, and Stykkishólmur is no exception.
Try Narfeyrarstofa for a satisfying meal, or indulge in a sweet treat like a kleina donut from Nesbrauð Bakari.
Arnarstapi
This little coastal village may be modest, but it’s surrounded by striking cliffs and lava fields. Yet, for some reason, it doesn’t get nearly as much attention as other Snæfellsnes spots.
One of the best things to do here is the hike between Arnarstapi and Hellnar, where you cross an actual lava field!
Pro tip: Try the homemade waffles at Fjöruhúsið. You won’t be sorry!
Learn about the best places to visit in Snæfellsnes below. 👇
➡️ READ: Snæfellsnes Peninsula:10 Bucket-List Worthy Places in West Iceland
Well-known Towns in Iceland Worth Mentioning
While the following towns aren’t really hidden gems, I couldn’t bring myself to leave them out. They’re absolutely worth a visit!
Vík: This town is heavily touristed due to its black sand beach and proximity to major stops like Dyrhólaey on the popular South Coast region. In my opinion, Vík is a must-see!
Akureyri: While technically Iceland’s second-largest city, this is still Iceland – so it still has a small-town vibe. That said, as the capital of the North, there’s a lot to do here. And did you know that the stoplights here are heart-shaped? I mean, do we even need more reasons to visit? 😉
I highly recommend spending some time in Akureyri if you’re visiting the North.
Discover Towns in Iceland with My Guidebooks + Maps
You could just follow the same path as every other tourist: Golden Circle, Ring Road, Blue Lagoon….done!
But if you want the kind of trip that feels personal –
The kind where you discover a tucked-away hot spring with no one else around…
Or a restaurant that serves homemade tomato soup straight from the owner’s garden..
And yes, explore the beautiful towns in Iceland that photos don’t do justice…
You’ll need to dig a little deeper.
That’s where my 👉 Iceland Maps + Guidebooks come in.
I live here.
I explore constantly.
And I’ve poured my favorite hidden spots, practical tips, and planning tools into these region-specific guides so you can:
✅ Skip the tourist traps.
✅ Find local favorites and
✅ Plan smarter.
No second-guessing your route, missing key stops, or piecing it all together yourself.
Each guide includes a digital map with hundreds of pinned locations.
Everything from museums to waterfalls, plus practical details like where to find gas stations and the nearest grocery store.
It’s all there!
If your goal is to visit Iceland like a local, this is your shortcut.
Start planning the kind of trip you’ll still be talking about years from now with my Iceland Maps + Guidebooks.
Happy Planning!
