10km (6 miles) S of Reykjavík.
From the main road, it's easy not to notice Hafnarfjörður, even though it's Iceland's third-largest town (pop. 23,000) and second-busiest port. Once you've reached the harbor, however, it's clear Hafnarfjörður has a distinct identity. It was a major trading center as far back as the early 15th century, first with the British, then the Germans, before the Danish king imposed a trade monopoly on Iceland in 1602. Unlike Reykjavík, the town is carved out of the surrounding lava field.
Icelanders are often subjected to two stereotypes: 1) that they are modern-day Vikings, and 2) that they still believe in elves. Icelanders hardly disown these stereotypes, but may cringe when confronted with them in crude forms. Two of Hafnarfjörður's biggest tourist draws -- the Viking Village and Hidden Worlds elf tours -- play up these stereotypes outrageously. If you're visiting in June and want kitsch overload, come to Hafnarfjörður for the Viking Festival.