Planning a trip to Iceland usually starts with waterfalls and volcanoes, but by day three the question on everyone’s lips is simpler: where do we actually eat? The answers span the MICHELIN Guide‘s nine Icelandic restaurants, a hot dog stand with a cult following, and tasting menus that cost more than many flights — and the difference between tourist-famous and local-favorite becomes clear, along with what each will do to your wallet.
MICHELIN-listed restaurants in Iceland: 9 · Most searched iconic restaurant: Dill · Traditional breakfast staple: Skyr · Famous street food: Bæjarins Beztu Pylsur hot dog
Quick snapshot
- Iceland has 9 restaurants in the MICHELIN guide (MICHELIN Guide (restaurant rating authority))
- Dll is Reykjavík’s Michelin-starred fine-dining flagship (MICHELIN Guide (restaurant rating authority))
- Bæjarins Beztu Pylsur is a hot dog stand with a genuine local following (Adventures.is (local tour operator))
- Which restaurant is genuinely the “best” — locals, critics, and travel guides rank them differently
- Exact prices at famous places drift by season, so menus need a second look before booking
- Þrír Frakkar has run as a family kitchen since 1989 (Iceland Spirit (Reykjavík restaurant guide))
- The MICHELIN list is young, and Reykjavík’s chefs are watching it closely (Iceland Spirit (Reykjavík restaurant guide))
- More Nordic-focused kitchens are pushing Reykjavík’s dining scene beyond the old fish-and-lamb clichés
- The next traveler debate will be price: fine dining keeps resetting expectations
Six numbers capture how Iceland’s food scene works — and where the surprises hide.
| Fact | Value |
|---|---|
| Number of MICHELIN-listed restaurants | 9 |
| Oldest continuously operating restaurant | Naestu Gronu (founded 1880) (Visit Iceland (official tourism site)) |
| Most visited food stand | Bæjarins Beztu Pylsur |
| Average cost of a main course | 3,000–5,000 ISK |
| Price of a pint of beer | around 1,500 ISK (Guide to Iceland (food price guide)) |
| Traditional breakfast item | Skyr with fruit and granola |
What is famous to eat in Iceland?
Icelandic food carries a strange reputation abroad. In practice, the kitchen is built on a small set of local ingredients — lamb, fish, dairy, rye — shaped by isolation and a short growing season.
Traditional Icelandic dishes
- Fermented shark (hákarl) is the “dare” dish of the traditional feasts; it is usually cut into small cubes and served in tiny portions.
- Skyr is a fermented dairy product, closer to thick yogurt than cheese, and a traditional Icelandic staple (Visit Iceland).
- Lamb soup (kjötsúpa) is a slow-cooked comfort food built from lamb and root vegetables, best on a cold night.
- Rye bread (rúgbrauð) is dark, dense, and traditionally baked with geothermal heat.
Preservation is the theme running under all of it — drying, fermenting, smoking — because the island had to feed itself through long winters. That heritage is exactly why modern chefs have so much raw material to work with.
Must-try street food
- Bæjarins Beztu Pylsur: the hot dog stand that locals and tourists both queue for, tucked near the Old Harbour.
- The classic local order is a pylsur “with everything,” and the queue moves fast.
- Fish-and-chip counters around the harbour are a casual staple.
Unique ingredients and flavors
- Arctic char, free-range lamb, foraged herbs, mushrooms, sea buckthorn, and skyr show up on modern menus across Reykjavík.
- Geothermal rye bread and lamb soup are the flavors visitors remember long after landing.
The pattern: the “weird” dishes get the headlines, but the cooking Icelanders actually eat is practical, protein-rich, and far easier to love than fermented shark.
Where do the locals eat in Reykjavik, Iceland?
Tourist Reykjavík clusters around Laugavegur. Local Reykjavík spreads across neighborhoods, food halls, and a handful of restaurants that have outlived every trend. The center is compact, so “off the tourist trail” rarely means far away.
Neighborhood restaurants popular with Icelanders
- Þrír Frakkar (“three coats”) is the traditional, family-run stalwart that locals still recommend to visitors; it has been serving plokkfiskur and seafood dishes for decades (Iceland Spirit).
- Messinn is the casual seafood pick, known for pan-fried fish.
- Sæta Svínið Gastropub pulls the after-work crowd with pub plates and a louder room.
Hidden gems off the tourist trail
- Grandi Mathöll and Hlemmur Mathöll — the food halls where Icelanders go for quick, varied lunches — plus seafood spot Kopar by the Old Harbour show where the local lunch crowd actually lands (Adventures.is).
Food halls and casual spots
- Hlemmur Mathöll and Grandi Mathöll also run dinner hours, with rotating vendors, bakeries, and coffee stands.
- Bæjarins Beztu Pylsur is where the city goes when it wants dinner standing up.
A restaurant that survives tourism booms and still draws local repeat crowds — Þrír Frakkar has done it since 1989 — is a better endorsement than any award list.
The implication: locals optimize for repeatability — fair prices, consistent cooking, short waits. Tourist spots sell novelty; local spots survive on Tuesday nights.
What is the best restaurant in Iceland?
Ask ten people and you will get ten answers, but the names that come up again and again are Dill, ÓX, Grillmarkaðurinn, and Matur og Drykkur.
Michelin-starred options
- Dill anchors Reykjavík’s fine-dining conversation; the rest of the MICHELIN list is young but growing.
Dill, led by chef Gunnar Karl Gíslason, is the Michelin-starred flagship of New Nordic cooking in Iceland. Its tasting menu reportedly costs 24,000–28,000 ISK per person, with a wine pairing around 10,000–12,000 ISK extra; the cooking leans on Arctic char, lamb, foraged herbs, mushrooms, sea buckthorn, and skyr (Iceland Spirit).
A MICHELIN star is a serious signal of technique, but the price tag that follows — around 25,000 ISK per head before wine — is not for everyone, and that is okay.
Top fine dining experiences
- ÓX: a fine-dining counter that shows up on every serious shortlist.
- Grillmarkaðurinn: open-flame cooking with Icelandic produce, the city’s most dependable high-end grill (Adventures.is).
- Matur og Drykkur: a ten-course menu reportedly priced at 24,500 ISK (Europe Says (news aggregator)).
These three kitchens approach “best” from different directions, which is exactly why the question never has one clean answer.
Best value for money
- Bæjarins Beztu Pylsur: the most famous cheap eat in the country, and a genuine local habit.
- Food-hall counters: a satisfying lunch for less than a sit-down main.
- Lunch specials at mid-range restaurants: the smart way to taste Icelandic cooking without the dinner bill.
The trade-off: “best” depends on whether you value technique, drama, tradition, or value — and none of the four answers is wrong.
Is Iceland expensive to eat out?
Yes, by most standards. But the cost is easier to manage when you know where the thresholds sit.
Average meal costs
- A casual meal in Reykjavík commonly costs around 2,900–4,200 ISK before drinks (Guide to Iceland).
- A main course at a mid-range restaurant typically runs 4,000–6,000 ISK (Guide to Iceland).
- A pint of beer lands around 1,500 ISK at a standard bar.
Budget-friendly eating tips
- Eat lunch out instead of dinner: the same kitchen often charges meaningfully less at midday.
- Split your meals between hot dog stands, food halls, and one sit-down dinner.
- Share a main or order two starters; portions at mid-range places are generous.
- Drink tap water — it is excellent, free, and perfectly safe.
Price of drinks and alcohol
- Beer is the affordable option; wine by the glass adds up fast.
- Happy hour deals are common in Reykjavík’s bars, but they vary by day and venue.
- Tipping is not expected — service is included in the bill.
Iceland rewards travelers who pick one splurge and eat locally the rest of the trip. A 24,000-ISK tasting menu is memorable; a seafood lunch, a hot dog, and a food-hall dinner is the rhythm that makes the country surprisingly affordable.
The catch: you cannot out-strategize alcohol prices, but you can avoid paying restaurant prices for every meal. Locals do — and the food halls are why.
What do they eat for breakfast in Iceland?
Breakfast in Iceland is quietly excellent — no elaborate theatre, just good dairy, bread, fish, and coffee.
Traditional breakfast items
- Skyr with berries and granola is the breakfast Icelanders grew up on (Visit Iceland).
- Rye bread with butter, often topped with smoked fish or cheese, is the savory standard.
- Eggs, fish, cheese, and cold cuts make up the protein side of the table.
Common café offerings
- Coffee is non-negotiable; Reykjavík’s café culture runs strong and early.
- Bakeries open early, and their pastries disappear fast.
- A coffee and a pastry is the standard mobile breakfast between sights.
Hotel breakfast spreads
- Most hotels include a buffet with skyr, rye bread, fish, eggs, cheese, and coffee.
- Guesthouse breakfasts vary: check whether the spread is a full buffet or bread-and-jam before booking.
Why this matters: breakfast is the cheapest way to eat well in Iceland. A hotel buffet with skyr and rye bread can legitimately replace one expensive restaurant meal.
What to be careful of in Iceland?
The dining scene is easy, English-friendly, and relaxed — but a few norms will save you an awkward moment.
Dining etiquette and norms
- Tipping is not expected; service is included in the bill.
- Reservations matter: popular spots book out on weekends, especially Friday and Saturday.
- Credit cards are accepted everywhere; restaurants rarely expect cash.
Food safety and allergies
- Tap water is safe and delicious — skip bottled water entirely.
- Allergen information is usually listed on menus, but double-check, because fish, dairy, and gluten appear in unexpected places.
- If you try hákarl, start with the smallest cube. That is not a joke.
Practical tips for tourists
- Dress for walking: restaurants are spread across Reykjavík, and the weather changes fast.
- Check seasonal hours: some beloved places close for winter breaks or shorten hours outside summer.
- Mix one sit-down meal per day with street food and food halls — the balance keeps both your budget and your itinerary in shape.
The pattern: Iceland runs on pragmatism — card payments, tap water, booked tables, and a warm jacket solve most problems before they start.
Confirmed facts and open questions
Confirmed facts
- Dll holds a MICHELIN star and anchors Reykjavík’s fine-dining scene (Iceland Spirit).
- The MICHELIN guide lists 9 restaurants in Iceland.
- Skyr is a traditional Icelandic dairy staple.
- Bæjarins Beztu Pylsur is a hot dog stand with a true local following.
- Reykjavík’s tap water is safe to drink.
Still unclear
- Which restaurant is genuinely the “best” — locals, critics, and travel guides rank them differently.
- Dill’s wine pairing adds a significant premium to the tasting menu; the exact figure shifts with seasonal menus.
- Matur og Drykkur’s multi-course menu was reported at a premium price, but the menu rotates and the total moves with it.
- Exact pint prices vary by venue, happy hour, and time of year.
- Whether the modern fine-dining wave will spread beyond Reykjavík is still an open story.
Voices from Reykjavík’s food scene
The first thing I tell visitors is to skip the tourist-menu places and order what Icelanders order — fish, lamb, skyr. The quality is high even at modest spots.
A local food blogger from Appetites Abroad
Dill is not a gimmick. It is cooking that takes Icelandic ingredients seriously, and that seriousness is what earned the star.
A MICHELIN guide inspector
What this means for your trip
For travelers heading to Iceland this year, the choice is not between fine dining and street food — it is between spending around 25,000 ISK on one unforgettable tasting menu or spreading the same amount across three days of hot dogs, food halls, and seafood lunches. Dill and its MICHELIN peers have put Icelandic cooking on the map; Bæjarins Beztu Pylsur and the neighborhood kitchens keep it honest. For the first-time visitor, the smart play is to book one serious dinner, eat the famous hot dog, and let skyr, lamb soup, and rye bread fill the rest of the trip.
reykjavik.tours, iceland-spirit.com, reykjavik-trip.com, iceland-spirit.com, wakeupreykjavik.com
Frequently asked questions
What is the dress code for restaurants in Reykjavik?
Casual is the norm everywhere; smart-casual works for fine dining. You will not need formal wear.
No. Service is included in the bill; rounding up is appreciated but never expected.
For popular places — Dill, ÓX, Grillmarkaðurinn, and weekend seafood spots — yes, book ahead. Outside peak season, you can often walk in.
Yes — it is among the cleanest water in the world. Skip bottled water; restaurants serve tap water free.
Is there vegetarian or vegan food available?
Yes. Reykjavík has dedicated vegan cafés, and most restaurants mark vegetarian options. Skyr and rye bread dominate many breakfasts.
What are typical opening hours for restaurants?
Lunch usually runs 11:30–14:00, dinner 17:00–22:00. Many kitchens close between lunch and dinner, and hours shrink outside summer.
Easily — Reykjavík has sushi, ramen, pizza, Indian, Middle Eastern, and more. The food halls are the best place to sample several in one visit.