Höfn is situated by the mouth of Hornafjörður fjord and major structures have been erected to safeguard the passing of ships. The primary industries are fishing, tourism, trade and manufacturing.

The majority of migrating birds to Iceland first reach land in the Hornafjörður region; hence a bird research centre has been set up at Höfn. Trade was moved from Papós to Höfn in 1897. At the Höfn harbour there is a memorial to the arrival of first settler Ingólfur Arnarson to Iceland, a gift from Norwegian seafarers in 1997.