Akureyri is positioned on the west side of the fjord Eyjaförður right in its bottom. It is surrounded by mountains, the highest being Súlur 1213 meters (3980 feet) and Hlíðarfjall 1116 meters (3661 feet.) The coast in the area is a narrow strip of flat land before a steep but low hill. In earlier times a few spits of land (Icelandic: eyri, thus Akur-eyri) jutted from the narrow coast but a lot of land has since, been claimed from the sea so that today the coastline is more even except for the largest spit of land (eyri), Oddeyri which was formed by the river Glerá that runs through the city. The body of sea between Oddeyri and the fjord’s bottom is known as Pollurinn and is known for calm winds and a good natural harbor. The center of Akureyri today is at Ráðhústorg square near the northwest corner of Pollurinn. The neighborhoods of Akureyri are: Innbær, the oldest part of town on the land strip between the hill and Pollurinn south of the center area; Brekkan, on top of the hill; Oddeyri on the peninsula with the same name and Glerárhverfi on the north bank of Glerá river. The city’s position in the bottom of a long fjord surrounded by high mountains has the influence that the climate is actually more inland than coastal meaning greater variants in temperature (warmer summers, colder winters) than in many other parts of Iceland. The surrounding mountains also shield the city from blowing winds.
The Norse Viking settler Helgi Magri Eyvindarson originally settled the area in the 9th century AD. The first mention of Akureyri dates back to 1562 when a woman was sentenced there for adultery. In the 17th century Danish merchants based their camps on the actual Akureyri which was one of the numerous spits of land in Pollurinn. The reasons for choosing this exact spot for the trading operations were mainly the outstanding natural harbor and the fact that Akureyri is located by a very productive agriculture area. The Danish merchants did not live at Akureyri the whole year though, in winters the houses were locked up and the merchants went home. Permanent settlement at Akureyri started in 1778 and the town was granted its municipal charter by the king of Denmark (and at the time Iceland also) eight years later in 1786 along with five other towns around Iceland. The king hoped to improve the living conditions of Icelanders by this action because at the time, urban centers were virtually non-existent in Iceland and had never existed. As far as Akureyri is concerned the king was unsuccessful, Akureyri did not grow from its population of 12. In 1836 Akureyri lost its municipal status but gained it back in 1862. From that point, Akureyri started to grow because of the excellent port conditions and perhaps more because of the productive agricultural region around it. Industries processing agricultural products became the backbone of the city and spurred its further growth. The 20th century in Iceland became the scene of a mass exodus from the countryside to the cities and Akureyri had its share in that. Commerce and service industries grew to be the primary employers in Akureyri as the manufacturing industries started to decline in the 1990’s.
In the last ten years, fishing industries have become more important in Akureyri as two of the major fishing companies of Iceland have established their headquarters there, Samherji and ÚA. Tourism has become a more important source of revenue and is expected to grow further in coming years. The University of Akureyri was founded in 1987 and is growing rapidly.