Nature rules in Iceland: The small northern country is home to spouting geysers, lagoons filled with icebergs, waterfalls that spill down from towering cliffs and black moors patched with icy ponds. The raw power that fuels the island’s geological oddities also appears to stoke its 300,000 citizens, who seem just as driven to create: Ask Icelander Gunnar Marel Eggertsson why he built and sailed a replica Viking ship from Iceland to Newfoundland in 2000 and, with a shrug of his broad shoulders, he’ll say "Because I could." Ask what drove Lisbet Sveinsdottirr and her two friends to create their minimalist, avant-garde ELM clothing line and she’ll say "We just wanted to be different from what we saw in the stores." There isn’t much that Icelanders won’t consider trying – and, for the most part, they succeed.

Isolated for the better part of the last millennium, Icelanders have also learned how to entertain themselves, which explains why the music, art and fashion scenes of Reykjavik (with a population of 175,000) rival those of some of Europe’s largest cities. Björk is still probably its most famous citizen, although the band Sigur Rós is hot on her heels, as is Hollywood: Blockbusters like
Batman Begins,
Die Another Day and
Lara Croft: Tomb Raider were filmed here.

One of the bonuses of Iceland’s small size is how much you can see in a short time. Soak in the silky geothermal waters of The Blue Lagoon, dine on the sweetest, freshest lobster you’ll ever taste and go beachcombing along a mysterious black-sand h beach, then head out on the town to experience Reykjavik’s raucous nightlife – all in the same day.

The scene

Pop into any of the cafés along cobblestoned Bankastraeti and Tryggvagata streets and mingle with young creative types who converge here for coffee and conversation. Start a walking tour at Hallgrímskirkja cathedral – the tallest building in town – whose arching walls mimic the towering basalt columns seen in the countryside. One of the coolest museums to visit is Reykjavik 871 -2, whose cryptic name refers to the date (give or take a year) of the first Icelandic settlement. A multimedia show explores the remains of a Viking longhouse on the spot where it was discovered, pinpointing the birth of the Icelandic nation. Don’t miss a visit to Perlan, a spaceship-like dome resting on top of the city’s six hot-water towers. It provides a 360-degree view of the city, with Mount Esja looming above the bay. Prices in the revolving restaurant are astronomical, but the view from the bar is well worth it. Try the Sensitive Cocktail, a moody mix of crème de cassis and crème de banane with a dash of cognac.

Where to stay

The epicentre of Icelandic cool, the sleek 101 Hotel attracts Reykjavik’s beautiful people, who gather for cocktails in spare but cozy surroundings. Desserts like Cognac-Marinated Chocolate Cake with Whipped Cream and Strawberries make it a must-visit.

Nostalgia buffs and art deco aesthetes should book a room at the Hotel Borg, which boasts a chic palette of black, cream and slate grey, as well as a rich history: Here, Marlene Dietrich sipped ice-cold martinis and romance blossomed between Allied soldiers and Icelandic beauties during the Second World War.

Where to shop

There’s something to be said for living 1,000 kilometres from the nearest H&M. Icelanders have their own style: a mash of local, vintage designers and global influences that create a look that’s as edgy as the landscape. Stroll Laugavegur, Reykjavik’s main shopping street, to explore some of the country’s best-loved shops – many of which double as art galleries and music venues. Striking and eccentric yet comfortable, the fashions from ELM – a design collective that h counts Oprah among its fans-are sold at Harvey Nichols and Liberty in London. Black and white are ELM palette mainstays, but colourful accent pieces inspired by the Icelandic landscape are added to each collection. Erna Steina Gudmundsdóttir, one of the label’s three founders, says, "We’re not consciously influenced by nature, but it’s unmistakably there in our clothes."

Kronkron is as colourful as a candy store and offers fashion from some of Europe’s top style iconoclasts, including Vivienne Westwood. The Naked Ape is artist Sara Maria Eythorsdottir’s shop-cum-party-venue, where long-legged Icelandic girls stock up on her silkscreened hoodies and tees while checking out the rotating art show on the walls.

Where to drink and dine
"Icelandic cuisine surprises everyone," says Jeff Tunks, one of Washington, D.C.’s most-celebrated chefs, who visits Reykjavik every year for inspiration. "Its ingredients are unmatched – most of them are organic, sustainably farmed or grown in geothermally heated greenhouses." Tunks singles out Icelandic lamb as being "the best in the world."

One of the most talked about bistros is VOX, which is so serious about sourcing its ingredients from Iceland and nearby Scandinavia that it created the "Manifesto of New Nordic Cuisine." Try Lamb Three Ways (a meat soup, curry and filet) or, a true Icelandic delicacy, Sautéed Reindeer with Walnuts and Icelandic Wild Mushrooms. Head to Fish Market, voted one of
Condé Nast Traveler‘s "Hot Tables of 2008," which offers the best seafood in the city, like Icelandic Redfish with Grilled Eel and Fresh Hoba Leaf.

Where to party
Ever since The Sugarcubes (led by Björk) became indie heroes in the ’80s, Iceland’s music scene has enjoyed worldwide renown. The heart of the scene is 12 Tonar, a record store, café and street-front indie label that features live bands on Fridays. Don’t be in a rush to hit the clubs: Lines don’t form until 1 a.m.

Look for a London Underground sign above the door of a creaky old house and you’ll find Kaffibarinn, a favourite watering hole partly owned by Blur’s Damon Albarn. Cozy and candlelit, this is the place where locals gather before heading out to clubs like NASA – Reykjavik’s biggest and busiest club – to catch up-and-coming bands playing their first gigs.