Capital Region (Iceland) in the context of Reykjanes peninsula

Reykjavík is the capital and largest city of Iceland. It is located on the southern shore of the Faxaflói bay in southwest Iceland and has a latitude of 64°08′ N, making it the world's northernmost capital of a sovereign state. Reykjavík has a population of around 139,000 as of 2025, and the surrounding Capital Region has a population of around 249,000, constituting approximately 64% of Iceland's population.

According to Landnámabók, the settlement of Iceland began in Reykjavík when Ingólfur Arnarson arrived from Norway in the year 874. For over 900 years following this, there was no urban development; the city was officially founded in 1786 as a trading town and grew steadily as it transformed into its current state as the centre of Iceland's cultural, economic, and governmental activity. It is popular with tourists and is consistently ranked as one of the cleanest, safest, and most environmentally friendly cities in the world.

As a candidate country of the European Union, Iceland (IS) is included in the Nomenclature of Territorial Units for Statistics (NUTS). The three NUTS levels are:

• NUTS-1: IS0 Iceland
• NUTS-2: IS00 Iceland
• NUTS-3: Capital area / Rest of country
  • IS001 Höfuðborgarsvæðið (Capital Region)
  • IS002 Landsbyggð (rest of country)

Below the NUTS levels, there are two Local Administrative Unitary levels (LAU-1: regions, LAU-2: municipalities).

Southern Peninsula (Icelandic: Suðurnes, pronounced [ˈsʏːðʏrˌnɛːs] ) is an administrative unit and part of Reykjanesskagi (pronounced [ˈreiːcaˌnɛsˌskaijɪ]), or Reykjanes Peninsula, a region in southwest Iceland. It was named after Reykjanes, the southwestern tip of Reykjanesskagi.

The region has a population of 30,933 (2024) and is one of the more densely populated parts of the island. The administrative centre is Keflavík, which had 7,000 residents when it merged with the nearby town of Njarðvík and Hafnir in 1995 to create Reykjanesbær, which is the largest settlement outside the Greater Reykjavík area; in 2018, the region had a population of 17,805. The region is the location of Keflavík International Airport, the major point of entry for Iceland. Some fishing towns, such as Grindavík, Njarðvík and Sandgerði, are situated on the peninsula.

Akureyri (Icelandic pronunciation: [ˈaːkʏrˌeiːrɪ], locally [ˈaːkʰʏrˌeiːrɪ] ) is a town in northern Iceland, the country's fifth most populous municipality (under the official name of Akureyrarbær [-ˌeiːrarˌpaiːr̥], 'town of Akureyri') and the largest outside the Capital Region. The municipality includes the town's neighbourhood at the head of Eyjafjörður and two farther islands: Hrísey at the mouth of Eyjafjörður and Grímsey off the coast.

Nicknamed the "Capital of North Iceland", Akureyri is an important port and fishing centre. The area where Akureyri is located was settled in the 9th century, but did not receive a municipal charter until 1786. Allied units were based in the town during World War II. Further growth occurred after the war as the Icelandic population increasingly moved to urban areas.