A village in Skagafjörður municipality southeast of Reykjarhóll, still exists on local services and catering that began in 1931. A school, services to the agricultural industry, shops and tourist services are also important to the economy. Greenhouse market gardening and reforestation are other activities in this geothermal area that provides heating for houses. Skagafjörður natural history museum is located in Varmahlíð.

A delightful outdoor recreation area may be found in the Reykjarhlíð forest, above the town. The Varmahlíð area offers diverse leisure activities, such as river rafting, horse riding and horse shows.

  • Marked hiking path to Reykjarhóll hill.

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