View from to Perlan with the Mountain Esja in the Background, Re
View from to Perlan with the Mountain Esja in the Background. Reykjavík is the capital and largest city of Iceland. It has a latitude of 64°08' N, making it the world's northernmost capital of a sovereign state, and is a popular tourist destination. It is located in southwestern Iceland, on the southern shore of Faxa Bay. With a population of around 130,000 (and over 200,000 in the Capital Region), it is the heart of Iceland's cultural, economic and governmental activity.