Population of Iceland: Local Life and Tourist Guide

Austurstræti and Laugavegur shopping street in downtown Reykjavik
Over 60% of all people in Iceland live in Reykjavik.

The image of Iceland as a remote island in the far north, full of incredible scenery and natural wonders, is known worldwide. However, it is often forgotten that there are people who actually live here. In fact, people have lived in Iceland for over a thousand years and have their own unique language and culture.

Join me as I uncover the population of Iceland and unveil the truth about local life in the land of Ice and fire.


How Many People Live in Iceland?

Iceland’s population has increased steadily ever since the mid 20th century. Today, there are around 400,000 people living in Iceland. So that answers how many people live in Iceland.

But there is more to it. About 85% of the population in Iceland are native Icelanders. Then there are also thousands of Icelanders living abroad, so the total number of native Icelanders in the world is approximately around 350.000.

The interest of foreigners in Iceland has brought a wonderful multicultural element to Icelandic society. Blending beautifully with the country’s own Nordic culture. 

Where do people live in Iceland?

Iceland is a big island and yes, considering how many people live here it’s safe to say the country is largely unpopulated.

Especially when you factor in that 63% of all people live in the capital area of Reykjavik and over 80% live within one hour driving from Reykjavik. In cities like Akranes, Selfoss and Reykjanesbær, home of Keflavik Airport.

This however does not mean that you will only see civilization around the airport in Iceland. You will quickly discover this when driving the famous Ring Road of Iceland and passing through towns and villages all over Iceland. The most notable being Akureyri in the North and Ísafjörður in the Westfjords. 

Vik and black sand beach on iceland's southern coast.
The town Vik on Iceland's shouthern coast. 

Out of the city and into the wild

Since there are so few living here and there is so much space, it is extremely easy to find the untouched wilderness in Iceland. It is practically the entire island, with the small exception of Reykjavik and a few towns along Iceland’s vast coastline.

The best example is Iceland’s Highland. Full of beautiful mountains, glaciers, and volcanos. Along with rivers cutting through the barren black landscape, creating oasis around geothermal hot spots. Such as Hveravellir and Landamannlaugar hot springs.

Tourists in Iceland

There are of course other people in Iceland, then just residence. In fact, there are a lot more and they are usually referred to as tourists.

There are a lot more people that visit Iceland each year than living here. About 2 million tourists visit Iceland each year. While that may not sound like a huge number, please take into account that there are less than 400.000 people living in Iceland. So, it’s a lot of guests for a small nation to receive.

On the other hand, Icelanders are not as willing to explore their own nation's natural wonders. We go somewhere warm during our vacations. So, you will not find many Icelanders in the wild. However, the empty wilderness of Iceland can sometimes be crowded with tourists from abroad. Eager to explore Iceland’s unique scenery and hidden gems.

So no, Iceland is not empty, it just has one of the lowest population densities in the world. Meaning there’s no need to fear being overcrowded, unless you go to some tourist hot spots like Geysir, Gullfoss or Reynisfjara during high season, then maybe.

But other than that, you can visit the waterfalls, volcanos and all the other amazing  stuff in Iceland without being bothered.

Having rental car in Iceland

Whatever you’re looking for, the best way to explore Iceland is by a rental car. So, if you want to go on your own time and pace, having a rental car in Iceland should be your top priority.

Remember to choose a solid and reliable car rental in Iceland. Most importantly a car rental with great customer service and full coverage insurance. I recommend reading reviews and of course seek out coupon codes and other discounts. A trip to Iceland does not have to cost you a fortune, there are ways to enjoy Iceland without breaking the bank.

If you do want to check out the Highland in Iceland, you will need a 4x4. Highland roads are called F-roads in Iceland and only 4x4 and AWD are allowed there. I also recommend getting a SUV in Iceland when traveling in winter. It will be both safer and you’ll have a much better chance of exploring Iceland. Including taking a drive to see the Northern Lights. 

If that's not what you're looking for you can of course opt for a smaller car and rent an economy car in Iceland.

4x4 driving in the highlands in Iceland.
The untouched wilderness is never far away in Iceland. 

Fun Facts about Iceland Size.

  •         There are more sheep in Iceland than people.
  •         Iceland is the least populated country in the world with its own independent currency.
  •         Any town with over 5.000 residences is a city.
  •         There are no McDonalds or Starbucks in Iceland.


There you have it. There are about 400.000 people who live in Iceland. There are slightly less Icelanders in the world and we get up to 2 million visitors per year. Most people live in Reykjavik and in small towns on the coast.

Iceland’s natural wonders are however far from the city lights and the best way to explore them is hiring a car from Blue Car Rental.

So rent a car today and start planning your trip to Iceland. Drive around and explore the island's incredible scenery and natural wonders. As well as enjoying the unique culture found in the big island with a tiny population. We welcome you and all other guests to our beautiful island. 

For more fun facts about Icelandic Culture and Practical info on traveling in Iceland, please visit Our Blog. 







Lava Tour Horseriding

Lava Tour Horseriding

Get up close and personal with the lovely Icelandic horse. Not far from Reykjavík our trained guides will take you on a wonderful ride on friendly horses. You´ll see the amazing Icelandic nature! The riding paths lead through stunning scenery with green hills and lava fields.