Christmas in Iceland has always been an important occasion, bringing everyone together with food, drink and lots of celebrations. The festivities begin on the first day of advent and continue to Epiphany on 6th January. As Christmas coincides with the darkest months of the year, Icelanders put extra emphasis on bringing light to the streets by elaborately decorating their houses and traditional Christmas trees. The most famous phenomenon in Iceland around Christmas times is the presence of 13 Santas known as the Yule Lads. These mythical creatures live in the mountains for most of the year and walk into the towns one by one leading up to Christmas Eve, bringing gifts for the children. Thorlaksmessa, the day before Christmas, is another widely celebrated occasion where many of the locals eat skate and do any last minute Christmas shopping. New Year's Eve is another very popular celebration, as everyone takes to the streets to watch firework displays.

Guests visiting Iceland during the Christmas season can take part in The Hunt for the Christmas Creatures. Throughout advent each year, the treasure hunt invites participants to wander the city centre on a quest to find the thirteen yule lads and a number of other fascinating Christmas Creatures.

Iceland is also home to a number of Christmas markets each year. One of the most established markets is in Hafnarfjordur, just south of Reykjavik. Local residents, companies and visitors come together to celebrate the festivities during Advent. Spanning across the village, festivities are plentiful with the Christmas houses on the Þórsplan plaza being the main attraction for visitors.  The market is open annually from the end of November to Christmas Eve.