Reykjavík has one of the most impressive restaurant scenes of any city its size in the world. Three Michelin stars. Extraordinary local ingredients. A food culture that has transformed beyond recognition in the last twenty years. And yes — it is expensive. But there is excellent food at every price point, if you know where to look.
Eating Well in Reykjavík
Iceland is not cheap. This is one of the first things visitors discover, and the restaurant scene in Reykjavík reflects it honestly. A main course at a mid-range restaurant typically costs between 3,000 and 5,000 ISK. A fine dining tasting menu can reach 25,000 to 35,000 ISK per person. Even a simple lunch can feel expensive by the standards of most European cities.
But the quality justifies the price more often than not. Iceland’s raw ingredients — lamb raised on open highland pastures, fish pulled from the cleanest ocean on earth, vegetables grown in geothermally heated greenhouses — are among the finest available anywhere. The best Reykjavík restaurants treat these ingredients with the creativity and care they deserve, and the results are genuinely world-class.
The smartest strategy for eating well on a budget in Reykjavík: eat your largest meal at lunch. Most restaurants offer lunch menus at roughly half their dinner prices, with the same kitchen and the same quality. A 3,500 ISK lunch becomes a 6,500 ISK dinner — same food, different time of day.
Price Guide
Budget (under 2,500 ISK per person): Street food, bakeries, supermarkets, and quick casual dining
Mid-range (2,500 to 6,000 ISK per person): Casual restaurants, fish spots, and lunch menus at better restaurants
Splurge (6,000 to 12,000 ISK per person): Quality dinner at established restaurants
Fine dining (12,000 ISK and above): Tasting menus, Michelin-starred restaurants, special occasion dining
Budget — Eating Well for Less
Iceland’s most expensive meal is also its most famous — and it costs less than a coffee in some cities.
Bæjarins Beztu Pylsur — The Legendary Hot Dog Kiosk
No Reykjavík food guide is complete without it. The small red kiosk near the old harbour has been serving hot dogs since 1937, and the Icelandic hot dog — made from a blend of lamb, pork, and beef — is genuinely outstanding. Order eina með öllu: one with everything — mustard, ketchup, remoulade, raw onion, and crispy fried onion. Bill Clinton ate one here in 2004. He ordered without condiments, which Icelanders still find bewildering. Queue is normal, queue is worth it, queue moves fast.
Reykjavík’s Bakeries — Breakfast and Lunch Done Right
Iceland has a serious baking culture and Reykjavík’s independent bakeries are among the finest in Scandinavia. Brauð & Co on Frakkastígur is the most talked-about — its sourdough and pastries have earned a genuine following and the queue out the door on weekend mornings is its own recommendation. Sandholt Bakery on Laugavegur is larger, more established, and excellent for a sit-down breakfast or lunch — the open sandwiches are outstanding. Both offer high-quality food at prices that feel almost reasonable by Reykjavík standards.
Hlemmur Mathöll — Reykjavík’s Food Hall
The old Hlemmur bus station at the eastern end of Laugavegur has been transformed into a food hall bringing together some of Reykjavík’s most interesting small food producers under one roof. A Thai street food stall, an Icelandic lamb burger counter, a Japanese-Icelandic fusion spot, a craft beer bar, a ramen kitchen — the range shifts as vendors come and go, but the quality is consistently above what you would expect at the price. Good for a quick solo lunch, excellent for groups who want different things.
Bónus and Krónan — The Budget Traveller’s Friend
For self-catering or picnic lunches, Iceland’s budget supermarkets — Bónus (identified by the yellow pig logo) and Krónan — offer excellent local produce at reasonable prices. Skyr, smoked salmon, local cheese, fresh bread, and dried fish are all available and all of high quality. A supermarket lunch eaten on a bench by the old harbour costs a fraction of restaurant prices and can be just as satisfying. The Bónus on Laugavegur and the Krónan near Hlemmur are the most convenient for visitors in the city centre.
Mid-Range — The Sweet Spot of Reykjavík Dining
This is where Reykjavík’s food scene really delivers — casual, high-quality restaurants serving genuinely excellent Icelandic food without the ceremony or the price of the fine dining tier.
Sægreifinn — The Sea Baron
One of Reykjavík’s most beloved institutions — a tiny, no-frills harbour shack serving lobster soup and fish skewers grilled on an open grill. The lobster soup is the point: rich, creamy, deeply flavoured, and served with bread for less than 2,000 ISK a bowl. The atmosphere is deliberately eccentric — the walls are covered in kitsch maritime memorabilia and the seating is mismatched and cramped. None of this matters. The soup is extraordinary. Order it, eat it, go back for another bowl.
Fiskmarkaðurinn (Fish Market) — Splurge Quality at Lunch Prices
One of Reykjavík’s finest seafood restaurants offers a lunch menu that gives access to exceptional cooking at roughly half the evening price. The kitchen’s approach — Icelandic fish and seafood treated with Asian influences and real technical skill — produces dishes that have made the Fish Market one of the most consistently celebrated restaurants in the city. Go for dinner if budget allows; go for lunch if it does not. Either way, go.
Messinn — The Fish Pan Restaurant
Messinn has built its entire identity around one thing: Icelandic fish, cooked simply in a cast iron pan and served with brown butter and herbs. The concept could not be simpler. The execution is near-perfect. The fish of the day changes with the catch, the menu is short, and the result is some of the most satisfying fish cooking in the city at prices that feel fair rather than punishing. Two locations in Reykjavík — both reliably excellent.
Grillmarkaðurinn — The Grill Market
From the same group as the Fish Market but focused on Icelandic meat — particularly lamb, which is treated with the reverence it deserves. The lunch menu is exceptional value for the quality. The Icelandic lamb dishes are the standout: slow-cooked, deeply flavoured, and sourced from farms that the kitchen clearly has a relationship with. The interior is warm and designed with care — this is a place for a proper sit-down lunch when you want more than a quick bite.
Kaffivagninn — The Harbour Canteen
The oldest restaurant in Reykjavík, tucked into the working harbour away from the tourist waterfront, originally serving the fishermen and harbour workers who still eat here alongside curious visitors. The food is straightforward, honest, and very good — fish soup, fish of the day, lamb dishes, and the kind of hearty fare that sustains people doing physical work in an Icelandic winter. The atmosphere is completely unpretentious and completely Icelandic. One of the few places in the centre of Reykjavík that feels genuinely local.
Splurge — Exceptional Dinners Worth Every Króna
At this level, Reykjavík’s restaurant scene becomes genuinely world-class. These are restaurants worth planning a trip around.
Kopar — Harbour Dining at Its Finest
Kopar sits directly on the old harbour with views over the water and the mountains beyond. The menu focuses on Icelandic seafood and fish — prepared with confidence and creativity — in a warm, beautiful space that manages to feel both special occasion and genuinely relaxed. The fish of the day and the langoustine dishes are consistently the highlights. One of Reykjavík’s most enjoyable dinner experiences at a price that feels fair for what you get.
Apotek — Grand Space, Great Food
Set in a beautifully converted old pharmacy in central Reykjavík, Apotek offers a wide-ranging menu of Icelandic and international dishes in a striking interior of high ceilings, original wooden fittings, and warm light. The kitchen handles everything from lamb to lobster with equal confidence. A good choice for groups with varied tastes, for a business dinner, or for anyone who wants a handsome room alongside quality food.
Matarkjallarinn — The Food Cellar
A cellar restaurant in the heart of the 101 district with a strong focus on traditional Icelandic ingredients interpreted with modern confidence. The menu changes seasonally and reflects what is best from Icelandic farms and fisheries at any given time. The atmosphere — candlelit, underground, genuinely intimate — makes it an excellent choice for a special evening. The lamb and the Arctic char are consistently outstanding.
Fiskfélagið — The Fish Company
One of Reykjavík’s longest established quality seafood restaurants, set in a historic building in the old harbour district with a wine cellar dining room of considerable charm. The kitchen specialises in Icelandic fish and shellfish cooked with international influences — the fusion approach is applied with restraint and genuine skill. The tasting menu here is one of the best value introductions to serious Reykjavík dining available.
Fine Dining — Reykjavík’s Michelin-Starred Restaurants
Reykjavík has three Michelin-starred restaurants — a remarkable achievement for a city of 130,000 people. Each one takes a different approach to the same question: what does the finest possible Icelandic food look like?
Dill — Iceland’s First Michelin Star
Dill was the restaurant that changed how Reykjavík thought about its own food. When chef Gunnar Karl Gíslason opened it in 2009, he brought the New Nordic philosophy — local, seasonal, foraged, fermented, deeply rooted in the landscape — to Iceland for the first time. The restaurant earned Iceland’s first Michelin star and has held it through changes of chef and format. The current tasting menu is a journey through Icelandic ingredients in their most refined expression — dishes that look spare and taste extraordinary. Book months in advance for peak season visits.
Moss — The World’s Most Dramatic Restaurant Setting
Moss sits inside the Retreat Hotel at the Blue Lagoon — a glass-walled dining room looking directly out over the lava field and the milky turquoise water, with steam rising outside the windows and the sky above turning whatever colour Iceland decides to offer that evening. The setting alone would justify the visit. The food — a tasting menu of Icelandic ingredients interpreted by a kitchen of genuine ambition — matches it. This is one of the most immersive fine dining experiences in the world: food, landscape, and atmosphere inseparable from each other.
Óx — The Most Intimate Restaurant in Iceland
Óx seats eleven people around a single U-shaped counter. No more. There are no tables, no menu choices, no decisions to make — you arrive, you sit, and the kitchen cooks for you. The tasting menu runs to twelve or more courses, each one a small, precise, technically accomplished piece of cooking built around the finest Icelandic ingredients available that day. It is the most focused and the most personal fine dining experience in Iceland. Booking opens months in advance and fills immediately — if you want to eat here, plan as soon as your travel dates are confirmed.
Where to Drink — Coffee, Craft Beer, and Cocktails
Coffee
Iceland is one of the highest coffee-consuming countries per capita in the world and Reykjavík’s independent café scene is exceptional. Reykjavík Roasters on Brautarholt is the benchmark — excellent single-origin espresso and filter coffee in a quietly stylish space. Kaffitár, with several locations across the city, is Iceland’s best small chain: consistently good coffee, comfortable spaces, and a real understanding of what they are doing. Kaffi Vinyl on Hverfisgata combines good coffee with a record shop and a vegan menu — an unlikely combination that works completely.
Craft Beer
Iceland only legalised beer in 1989 and has been making up for lost time enthusiastically ever since. Mikkeller Bar on Hverfisgata is the best single destination for craft beer in Reykjavík — part of the celebrated Danish brewing group, it offers an exceptional rotating tap list in a beautifully designed space. Skúli Craft Bar near the old harbour is smaller, more local, and excellent — particularly strong on Icelandic producers. Borg Brugghús, Iceland’s largest craft brewery, has a tap room on the harbour where you can taste the full range alongside bar food.
Cocktail Bars
Reykjavík’s cocktail scene has grown significantly in recent years. Jungle Bar on Austurstræti is tropical, loud, and beloved by locals for its creative cocktails and long opening hours. Loft Hostel Bar on Bankastræti has a rooftop terrace and a good cocktail list — one of the best summer evening spots in the city. For something more refined, the bar at Hotel Borg on Austurvöllur square makes some of the best classic cocktails in the city in surroundings of 1930s elegance.
Practical Tips for Eating in Reykjavík
Book fine dining well in advance: Dill, Óx, and Moss fill up weeks or months ahead in summer. If these restaurants matter to your trip, book the moment your travel dates are confirmed — not after you arrive.
Lunch is the smart play: The majority of Reykjavík’s better restaurants offer lunch menus at roughly half the dinner price. If you want to experience quality Icelandic cooking without the full fine dining bill, lunch is consistently the best value meal of the day.
Cards are accepted everywhere: Iceland is almost entirely cashless. You will rarely need Icelandic Króna. Every restaurant, café, and bar accepts Visa and Mastercard without exception.
Reservations are worth making: Even mid-range restaurants fill up quickly in summer. For any restaurant you particularly want to try, book a day or two ahead at minimum. Most accept reservations by phone or online.
Tipping is not mandatory: Unlike North America, tipping is not a strong expectation in Iceland. Service charges are included in all prices. A tip for genuinely exceptional service is always appreciated but never obligatory.
The happy hour exists: Several Reykjavík bars and restaurants offer happy hour deals — typically from around 4 PM to 7 PM — with significant discounts on beer and cocktails. Given Iceland’s drink prices, this is worth knowing.
Quick Reference by Category
Iconic Reykjavík experience: Bæjarins Beztu Pylsur — the hot dog kiosk near the old harbour
Best soup in the city: Sægreifinn (Sea Baron) — lobster soup, harbour location, unforgettable
Best fish cooking: Messinn — simple, perfect, cast iron pan
Best for groups: Hlemmur Mathöll food hall — everyone finds something
Best local breakfast: Brauð & Co or Sandholt Bakery — sourdough and pastries
Best harbour dinner: Kopar — views, seafood, beautiful room
Best Michelin experience: Dill — the original, still the benchmark
Most dramatic setting: Moss at the Blue Lagoon — food inside a lava field
Most intimate fine dining: Óx — eleven seats, no menu, unforgettable
Best coffee: Reykjavík Roasters or Kaffitár
Best craft beer: Mikkeller Bar on Hverfisgata
Best budget lunch: Supermarket picnic from Bónus — harbour bench, same fish, fraction of the price
Eat Boldly — Iceland Rewards It
Reykjavík’s food scene punches far above its weight. For a city of 130,000 people at the edge of the Arctic, the quality, variety, and ambition of what is being cooked here is genuinely extraordinary. The ingredients are world-class. The cooking has caught up with them. And the city’s small size means that nothing is far away — you can walk from a lobster soup at the harbour to a Michelin-starred tasting menu in fifteen minutes.
Eat the hot dog. Have the lobster soup. Book Óx if you can get a table. And whatever budget you are working with, remember: lunch at the restaurant you could not afford for dinner is always an option.
At Iceland Paradise Tours, we are always happy to recommend restaurants that match your budget, your tastes, and your schedule. Ask us before you arrive and we will point you in the right direction.
Iceland’s food is part of the journey. Do not skip it.