Reykjavík is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay. Its latitu…Reykjavík is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay. Its latitude is 64°08′ N, making it the world's northernmost capital of a sovereign state. Reykjavík has a population of around 140,000 as of 2023. The Capital Region has a population of around 248,000.