Breiðdalsvík, (“Broad valley bay”) a short, wide bay with a wide beach of black sand across the end of the bay.T he small town lies at the entrance to the valley between the headlands of Kambanes and Streitishvarf. The first house was built in 1883 by the Gránufélagið association. The community developed slowly at first, but grew rapidly when major harbour improvements were made in the mid 20th century.

In 1896 the Brynesverslun store in Seyðisfjörður built a branch store at the top of Selnes at the eastern corner of Selnesbót. In the spring of 1906 the store burned down and the same year a new store was built to the west of the inlet. That building still exists today, making it the oldest building in Breiðdalsvík.