Christmas in Iceland: Markets, Traditions & Winter Driving

Visiting Iceland for Christmas is unlike spending the holidays anywhere else. Snow-covered lava fields, steaming hot springs, glowing Christmas lights, and the chance to see the northern lights create an atmosphere that feels both festive and wonderfully remote.

December is quieter than summer, but that’s part of the appeal. Iceland slows down, families gather, and the country leans into its traditions. For travellers who don’t mind winter weather and shorter days, Christmas in Iceland offers a peaceful, magical experience — especially if you explore by rental car.

This guide covers everything you need to know about visiting Iceland for Christmas, including traditions, what’s open, what to do, and how to plan a safe and enjoyable winter road trip.

Key Takeaways

• Christmas in Iceland is quiet, atmospheric, and deeply traditional, with celebrations focused on family, folklore, and cosy indoor living
• The main holiday period runs from 23–26 December, with Christmas Eve being the most important celebration
• Daylight is limited in December (around 4–5 hours), but this increases your chances of seeing the northern lights
• Many shops, museums, and restaurants close or operate on reduced hours between 24–26 December
• Christmas markets run from late November to 23 December, with the busiest period in mid-December
• Driving is possible and safe in winter with proper preparation and flexible planning
• A 4x4 rental car makes it much easier to visit Christmas markets, natural attractions, and quieter regions
• Booking accommodation, tours, and your rental car in advance is essential due to limited winter availability

What’s Christmas Like in Iceland?

Christmas is Iceland’s most important holiday, deeply rooted in family, folklore, and long-standing traditions. While the festive season is visible in decorations and events, it’s also a time when Icelanders intentionally slow down.

Homes are filled with candlelight, books are exchanged and read immediately, and many evenings are spent indoors enjoying good food and quiet company. For visitors, this creates a cosy atmosphere that contrasts beautifully with Iceland’s dramatic winter landscapes.

Unlike in many destinations, Christmas in Iceland doesn’t feel commercial or rushed — it feels personal and authentic.

When is Christmas in Iceland?

Although Christmas Day is on 25 December, celebrations stretch across several key dates.

• Late November: Christmas lights appear, shops decorate, and seasonal menus begin
• Early December: Advent traditions start and the Yule Lads appear around Reykjavík
• 23 December (Þorláksmessa): The unofficial start of Christmas
• 24 December (Christmas Eve): The main celebration
• 25 December (Christmas Day): Family visits and relaxation
• 26 December (Boxing Day): Continued gatherings and remembrance
• 31 December – 1 January: New Year’s Eve fireworks and celebrations
  

For travellers, it’s important to know that Christmas Eve evening is when Iceland truly shuts down.

Icelandic Christmas Traditions You’ll Encounter

The Yule Lads

Instead of one Santa Claus, Iceland has 13 Yule Lads, each arriving on a different night before Christmas. They’re playful rather than jolly and are part of Icelandic folklore rather than commercial tradition.

The Yule Cat

The legendary Yule Cat is said to eat anyone who doesn’t receive new clothes for Christmas — a tradition that originally encouraged people to finish wool work before winter.

Jólabókaflóð (Christmas Book Flood)

Books are exchanged on Christmas Eve and read immediately, often accompanied by hot chocolate or mulled wine. This tradition explains Iceland’s strong literary culture.

Traditional Christmas Food

• Hangikjöt (smoked lamb)
• Laufabrauð (thin, decorative fried bread)
• Seasonal sweets and biscuits

Trying local food is a great way to experience Icelandic culture beyond sightseeing.

Christmas Markets in Iceland (Dates & Highlights for 2025)

Christmas markets are a key part of the festive season in Iceland. They’re smaller and more intimate than many European markets, but that’s part of their charm — think cosy stalls, local crafts, traditional food, and plenty of folklore.

In 2025, Advent begins on 30 November, and most Christmas markets run until 23 December.

Best times to visit

• Early December (30 Nov – 15 Dec): Quieter, relaxed, and easy to explore
• Mid-December (16–20 Dec): Peak festive atmosphere, busier crowds
• 21–23 December: Final shopping days, extended opening hours, lively but crowded
  
  

Reykjavík Christmas Markets

Jólakvosin at Ingólfstorg Square: Reykjavík’s Main Christmas Market

• Location: Ingólfstorg Square, downtown Reykjavík
• Dates: 30 November – 23 December 2025
• Hours: 12:00–20:00 (longer at weekends)

This is the heart of Reykjavík’s Christmas celebrations and the most popular Christmas market in Iceland.

Expect an ice skating rink at the centre of the square, alpine-style wooden chalets, and stalls selling Icelandic crafts, decorations, jewellery, and wool products. Seasonal food is everywhere, including glögg (mulled wine), kleinur (Icelandic doughnuts), roasted almonds, and hearty lamb soup.

Choirs perform regularly, and the Yule Lads often make surprise appearances. The market links naturally with Austurvöllur Square and Austurstræti, creating a festive walking route through the city centre — especially atmospheric after dark.

Other Reykjavík Christmas Markets

Hjartatorg Square Market

• Location: Hjartatorg Square, near Laugavegur shopping street
• Dates: 5–6, 12–13, and 18–23 December 2025
• Opening hours: 16:00–20:00

A small and intimate market ideal for quick Christmas shopping, local treats, and handmade gifts while exploring downtown Reykjavík.

Lækjartorg Christmas Market

• Location: Lækjartorg Square, near the Old Harbour
• Dates: 14–15 and 17–20 December 2025
• Opening hours: 16:00–20:00

This boutique-style market focuses on Icelandic design, home décor, artisan chocolates, and pastries — perfect for unique, high-quality gifts.

Christmas Markets Near Reykjavík

Hafnarfjörður Christmas Village (Jólaþorpið)

• Location: Thorsplan Square, Hafnarfjörður
• Dates: 1–23 December 2025 (weekends and select weekdays)
• Opening hours: Fridays: 17:00–20:00, Saturdays & Sundays: 13:00–18:00, 23 December: 13:00–21:00 (extended hours)

Often considered the most authentic Christmas market in Iceland, this long-running village is known for its strong links to Icelandic folklore. Hafnarfjörður is famously associated with elves, and you’ll see that reflected in the decorations and storytelling.

Visitors can enjoy traditional music, ice skating, horse-drawn carriage rides, and frequent visits from the 13 Yule Lads. Hafnarfjörður is about 15–20 minutes from Reykjavík by car or bus, making it an easy addition to a winter itinerary.

Heiðmörk Forest Christmas Market

• Location: Elliðavatnsbær, Heiðmörk Nature Reserve
• Dates: Every Advent weekend (Saturdays & Sundays)
• Opening hours: 12:00–17:00

Set in a nature reserve just outside Reykjavík, this market offers a calm, nature-focused alternative with forest-inspired crafts, book readings connected to Jólabókaflóð, children’s activities, and sustainable Christmas tree sales.

Árbær Open Air Museum Christmas Experience

• Location: Árbær Open Air Museum, Reykjavík
• Dates: Sundays in December (typically 8 & 15 December 2025)
• Opening hours: 13:00–16:00
• Admission: ISK 2,350 (free for children, disabled visitors, and Reykjavík City Card holders)

Rather than a traditional shopping market, this is a living history Christmas event. Visitors can take part in activities such as laufabrauð making, candle dipping, wool spinning, and traditional food tasting, all set in historic buildings.

It’s especially popular with families and anyone interested in Icelandic culture and traditions.

Christmas Markets in North Iceland: Akureyri

If you’re travelling beyond the capital region, Akureyri, often called the “Capital of North Iceland,” offers some of the most charming Christmas experiences in the country.

Akureyri Christmas Market

• Location: Akureyri town centre (around Hof Cultural Centre and Hafnarstræti)
• Dates: Late November – mid/late December 2025
• Opening hours: Weekdays: 16:00–20:00, Weekends: 12:00–18:00

Akureyri’s Christmas market is smaller than Reykjavík’s but incredibly atmospheric. Snow-covered streets, festive lights, and a strong sense of local community give it a very traditional feel.

You’ll find handmade crafts, local food products, warm drinks, and regular cultural performances. The Yule Lads often visit, and the town’s Christmas decorations are among the most beautiful in Iceland.

Akureyri is an excellent base for a North Iceland winter road trip, especially if you’re looking for fewer crowds and dramatic snowy landscapes.

The Christmas House (Jólagarðurinn) near Akureyri

• Location: Just outside Akureyri (around 10–15 minutes by car)
• Opening hours: Open year-round, typically 10:00–18:00
• December note: Extended festive displays and seasonal treats throughout the month

The Christmas House is a unique stop, unlike anything else in Iceland. Open all year, it becomes especially magical in December, with festive displays, traditional Icelandic Christmas sweets, decorations, and gift items.

Inside, you’ll find Icelandic Christmas traditions explained in detail, shelves full of seasonal treats, and plenty of inspiration for gifts and decorations. It’s an easy stop if you’re exploring the Akureyri area by rental car and a favourite with both adults and children.

Getting Around Christmas Markets in Iceland

Most Christmas markets in central Reykjavík are walkable, but having a rental car makes it much easier to:

• Visit markets outside the city centre
• Travel to Hafnarfjörður, Heiðmörk, or North Iceland
• Combine markets with sightseeing or northern lights hunting
• Stay flexible during winter weather and holiday closures

With 24/7 pickup and drop-off, renting a car is especially practical during the Christmas season, when opening hours and public transport schedules are limited.

What’s Open (and Closed) Over Christmas in Iceland?

Understanding holiday closures is essential when planning your trip.

Typically closed or limited (24–26 December)

• Most shops and shopping centres
• Museums and indoor attractions
• Many restaurants (some reopen on 26 December)
  

Usually open

• Petrol stations
• Some supermarkets (shortened hours)
• Outdoor attractions
• Select tours and excursions
  
  

Planning tip: Buy groceries, fill up your fuel tank, and collect your rental car before Christmas Eve.

What to Do in Iceland at Christmas

Enjoy Reykjavík’s Festive Atmosphere

• Christmas markets and seasonal events
• Ice skating in the city centre
• Festive cafés and bakeries
• Walking tours through decorated streets
  
  

Explore Iceland’s Natural Wonders

Outdoor attractions are always accessible and often even more beautiful in winter:

• Waterfalls framed by ice
• Black sand beaches dusted with snow
• Snowy volcanic landscapes
• Hot springs surrounded by frost

Northern Lights Hunting

December offers some of the best chances of seeing the aurora, thanks to long nights and low light pollution. Having a rental car allows you to escape city lights and follow weather forecasts.

Christmas Road Trip Itineraries in Iceland

For winter travel — especially over Christmas — we strongly recommend spending at least part of your trip in Reykjavík. The capital has the most festive atmosphere, the widest range of open restaurants and services, and the easiest road conditions during the holidays.

All itineraries below are designed to include Reykjavík over Christmas, with short, manageable driving distances and flexibility for winter weather.

3–4 Days: Reykjavík & the Golden Circle

Ideal for travelling directly over Christmas. Base yourself in Reykjavík and enjoy a relaxed winter road trip with minimal driving.

Highlights:

• Reykjavík city centre, Christmas markets, and festive streets
• Þingvellir National Park
• Geysir geothermal area
• Gullfoss waterfall

Driving distances are short, roads are well maintained, and you can easily adjust plans if weather changes — making this itinerary perfect for Christmas week.

5–7 Days: Reykjavík & the South Coast

Perfect for first-time visitors. Spend Christmas in Reykjavík, then explore Iceland’s dramatic South Coast at a comfortable winter pace.

Highlights:

• Reykjavík at Christmas
• Seljalandsfoss & Skógafoss waterfalls
• Reynisfjara black sand beach
• Jökulsárlón glacier lagoon
• Optional ice cave tour

Driving distances remain manageable even in winter, and this route offers some of Iceland’s most iconic scenery.

7–10 Days: Reykjavík & a Flexible Winter Ring Road

Best for experienced winter travellers. Celebrate Christmas in Reykjavík, then continue around the Ring Road if conditions allow.

Key considerations:

• Always include buffer days
• Expect weather-related changes
• Focus on daylight driving only
• Be prepared to adjust or turn back if needed

A 4x4 rental car is strongly recommended for this itinerary, along with a flexible mindset and close monitoring of road and weather conditions.

Driving in Iceland in December

What Are Road Conditions Like?

When you’re driving around Iceland in December, you can expect some snow in some parts of the country, but not always. 

The Ring Road will nearly always be open during December, unless there’s particularly bad weather, in which case, portions of the road will close. 

If you travel to the north or east of Iceland, road closures become more common, as the roads in these areas of the country aren’t cleared as often. They’re typically more heavily impacted by snow, ice, strong winds and other weather-related hazards. 

The F-roads are completely closed during the winter and the Westfjords are impassable. 

Wherever you plan on driving while in Iceland during the winter, though, always keep an eye on road.is, as well as safetravel.is and vedur.is, so you can stay up to date on the latest weather forecasts and road statuses. 

Is it difficult to drive in Iceland in December?

No, it’s not necessarily difficult to drive in Iceland in December. However, a fair degree of caution is needed, to keep you safe during your travels. For the safest, easiest driving experience, stick to the larger cities, like Reykjavik, or the most frequently travelled routes, such as the Golden Circle or Ring Road. Both have plenty to see and do along them, and are well-maintained throughout the winter. 

For more information along these lines, be sure to check out our guide to driving in Iceland in the winter. 

Choosing the Right Rental Car for Christmas in Iceland

We always recommend our clients rent a 4x4 vehicle during their winter trip. There are many reasons for this, but, primarily, renting a 4x4 vehicle will give you more traction and greater clearance, which are both necessary during inclement winter weather. 

You can rent a variety of 4x4 vehicles, ranging in size. Both manual and automatic 4x4 cars are available. 

With Lava Car Rental, you benefit from:

• Winter or studded tires included
• Essential insurance included
• Debit cards accepted
• No young driver fees
• 24/7 self-service pickup and drop-off, ideal during holidays

These features make winter travel simpler, safer, and far less stressful.

Do I need a 4x4 car to drive in Iceland in December?

But while a 4x4 car is best when driving around Iceland in the winter, is it absolutely necessary? No. 

There’s no hard and fast rule that you need a 4x4 car when visiting Iceland in the winter. You can get by with a 2WD vehicle if you stick to Reykjavik and the Golden Circle. However, if you travel beyond these areas, you’ll definitely find that a 2WD vehicle may slow you down, as you’re forced to avoid roads that aren’t as well-maintained or cleared, or stop driving completely as you wait for winter weather events to pass. 

Important Christmas Rental Car Tips

• Book early — availability is limited in winter
• Choose self-service pickup for holiday arrivals
• Fuel up before Christmas Eve
• Plan shorter driving days
• Stay flexible with your itinerary
  

Is Iceland at Christmas Right for You?

Iceland at Christmas is perfect if you:

• Love winter landscapes
• Want a quiet, atmospheric holiday
• Enjoy road trips and nature
• Hope to see the northern lights
  

It may not be ideal if you prefer long daylight hours or busy nightlife.

Will We See You in Iceland This Christmas?

Christmas in Iceland is calm, atmospheric, and unforgettable. With thoughtful planning and the right rental car, you’ll experience festive city streets and silent, snow-covered landscapes at their best.

Explore Lava Car Rental’s 4x4 vehicles, book early, and start planning a Christmas road trip that feels truly special.

Rent your car in Iceland now and enjoy the freedom to explore this winter.