Reykjavík is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay. With a l…Reykjavík is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay. With a latitude of 64°08′ N, the city is the world's northernmost capital of a sovereign state. Reykjavík has a population of around 140,000 as of 2023. The Capital Region has a population of around 248,000.