Seyðisfjörður is situated at the innermost point of a fjord with the same name. The town began as a trading centre in the mid 19th century. In the latter part of that century, many Norwegians travelled to Iceland to fish herring, with many settling in Seyðisfjörður, including entrepreneur Otto Wathne (1844-1898). Many houses from that prosperous period have now been renovated, adding to the town's appeal. A naturally sheltered harbour has a positive influence on transportation by sea, including travel and transport abroad, and many new technologies first arrived in Seyðisfjörður, for example, the telephone. During WW II, the town was one of the main Allied bases in Iceland. During summer there are weekly ferry trips between Seyðisfjörður and Europe. There are numerous exciting hiking trails in the nearby mountains.

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