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In South Iceland, some of the best experiences happen between the big sights — in small towns and villages where you can slow down, meet locals, and get a feel for everyday life. From harbour communities to farming towns, these places add character, culture and great food to any itinerary.

Notable towns and villages include:

  • Eyrarbakki and Stokkseyri, historic coastal villages with strong culinary and maritime traditions
  • Hveragerði, known for geothermal living and greenhouse culture
  • Laugarvatn, Flúðir and Reykholt, communities shaped by farming traditions, geothermal resources and proximity to key historical sites
  • Hella and Hvolsvöllur, gateways to both history and highland landscapes
  • Vík í Mýrdal, a dramatic coastal village framed by black sand beaches and iconic sea stacks
  • Vestmannaeyjar, a vibrant island community shaped by fishing heritage and volcanic history
  • Kirkjubæjarklaustur, a small settlement surrounded by striking natural and historical sites
  • Höfn í Hornafirði, a fishing town closely connected to glacier landscapes and local food culture


A wide range of accommodation options is available, from guesthouses and boutique hotels to locally run stays. Travelers can easily move between towns, making hotel hopping across the region a natural and rewarding way to explore South Iceland.

Storytelling angle

In South Iceland, some of the most memorable moments happen between the highlights. A morning swim in the local pool, a conversation over coffee in a harbour-side café, or a homemade meal inspired by regional traditions. Moving from town to town, visitors experience how Icelanders actually live – not as spectators, but as temporary locals. Small-town South Iceland invites travelers to slow down, stay curious, and let everyday life become part of the journey.

  • Credit: Midgard Adventure

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