In the city of Reykjavík, the capital and largest city of Iceland

 The world's most northerly capital combines colorful buildings, quirky, creative people, eye-popping design, wild nightlife, and a capricious soul.

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(in Reykjavík, the capital and largest city of Iceland) Located on the Seltjarnar Peninsula, at the southeastern corner of Faxa Bay, in southwestern Iceland, it is the northernmost capital of a sovereign state in the world. According to tradition, the name Reykjavík (“Smoky Bay”) was inspired by steam rising from local hot springs. Reykjavík was founded in 874 by the Norseman Ingólfur Arnarson. A town began to develop in that location only centuries later. Before the 18th century most of what is now Reykjavík consisted of farms. In the 18th century a settlement was established to support the local wool industry. It was granted municipal powers and became the administrative center of the Danish-ruled island on August 18, 1786. Until the 20th century, Reykjavík was a small fishing village and trading post, but after the turn of the century it grew steadily. As of 1900, fewer than 7,000 people lived here; by 1956 this number had increased to 67,000. The town’s growing importance as a fishing and commercial port was a major factor behind this growth. The British and American occupation of Iceland during World War II provided further funding for the city as well as development of infrastructure. Since the 1980s the decline in the importance of fishing to the Icelandic economy has spurred substantial internal migration to Reykjavík. As a result, the city and its suburbs now account for about two-thirds of Iceland’s total population. The seat of the Alþingi (parliament) since 1843, Reykjavík became the capital of a self-governing Iceland under the Danish king in 1918 and of the independent Republic of Iceland in 1944. Buildings of note include the Parliament Building (1881) and the Church of Hallgrímur (1986).

+ Among the city’s cultural highlights are the National and University Library of Iceland (1994, a merging of the National Library [1818] and the University Library [1940]), the University of Iceland (founded 1911), the Iceland Symphony Orchestra, and the National Gallery of Iceland. Reykjavík had a population of around 140,000 as of 2023 (up from 121,822 in 2015). The Capital Region has a population of around 248,000. Until the 18th century, there was no urban development in the city location.

+ On the morning of 10 May 1940, following the German occupation of Denmark and Norway on 9 April 1940, four British warships approached Reykjavík and anchored in the harbor. For the remaining years of WWII, British and later American soldiers occupied camps in Reykjavík, and the number of foreign soldiers in Reykjavík became about the same as the local population of the city. (The Royal Regiment of Canada formed part of the garrison in Iceland during the early part of the war.) The economic effects of the occupation were positive for Reykjavík; In the post-war years, the growth of Reykjavík accelerated.