Flateyri, a village and authorised trading place, where trading actually started soon after 1790. Fishing and fish-processing are now the main industries. In 1889 the Norwegian Hans Ellefsen started a whaling station near Flateyri, called Sólbakki, which was burned down in 1901 and then closed. The official reception house of the Icelandic Government, by the lake in Reykjavík, was formerly Ellefsen’s residence, presented by him in 1904 to the government minister Hannes Hafstein and moved from Flateyri.

In the early hours of the 26th of October 1995 an avalanche fell on nineteen houses in Flateyri. Of the 45 people in the houses, 20 died. Population now 237. Before this tragic event the population of Flateyri was 380. A protective wall against avalanches has now been built above the town. The wall has a tower that provides an excellent view.