Iceland was settled by Nordic and Celtic people in the 9th century AD - tradition says that the first permanent settler was Ingólfur Arnarson, a Norwegian Viking who made his home where Reykjavik now stands. The Icelanders still basically speak the language of the Vikings. Iceland maintains another Norse tradition: the custom of using patronymics rather than surnames (an Icelander's given name is followed by his or her parent's first name (usually the father's) and the suffix -son or -dóttir, e.g. Guðrún Pétursdóttir (Guðrún, Pétur's daughter). Members of the same family can therefore have many different "surnames", which can sometimes create confusion for visitors. Because of the patronymic last names Icelanders primarily use first names, e.g. phone books are alphabetized by first name rather than last name. This also applies when addressing an individual. Icelanders would never expect to be addressed as Mr. or Ms. Jónsson/-dóttir no matter how important they might be.

Iceland has received a great number of immigrants last 10 years. In the last 5 years the population of immigrants has doubled. Most of these people come for employment. Most of them come from Eastern Europe and South East Asia. Immigrants in Iceland now count up to 10% of the population, giving Iceland similar proportion of immigration as Norway, Sweden etc.