Tucked away in the Eastfjords, over a winding mountain pass, lies the small but perfectly formed port town of Seyðisfjörður. Home to 665 people, it feels like a miniature world of its own. Its wooden houses and picturesque blue church are cradled by mountains on three sides, with the long fjord meandering out to sea on the other. The Norræna ferry arrives from Denmark via the Faroe Islands once a week, and Seyðisfjörður has a lively local culture that includes various restaurants, galleries, arts residencies, and festivals.

Stay: Hostel Hafaldan
Once the town hospital, today Hafaldan is a spacious hostel with a large shared kitchen, a choice of shared or private rooms, and spectacular mountain views from every window. If it’s booked out, or you’re looking for something more private, you could also try one of the town’s two hotels or many Airbnbs.

Shop: esualc
Phillipe Claus is a clothing designer based in Seyðisfjörður who hand-knits hoods, scarves, shawls, headbands and cowls from Icelandic wool. His studio and shop is in the old general store, so you can pop in and say hi, and come away with a piece of original design that’s both practical and beautiful.

Gallery: Skaftfell
Skaftfell is a smart contemporary art gallery with a year-round exhibition programme. In the top floor, there’s an apartment for artists in residence, and in the basement there’s a cosy bar and pizzeria, so after you’ve taken in their latest art show, you can relax with a beer and a pizza topped with reindeer or locally fished seafood.

Festival: LungA
The annual LungA festival is a participatory art festival, in which artist and ticket holders can sign up for various workshops, creating a lively, creative atmosphere that fills the town with spontaneous exhibitions, performances, and, of course, blow-out parties, with performances from the best up-and-coming bands in Iceland. The 2017 edition takes place 16-27 July.

Drink: Café Lára
The town’s bar is the eccentric Café Lara, which stocks a specially brewed bottled beer called El Grillo, named after a military vessel that lies on the bottom of the fjord. There are food options, and the bar also hosts occasional events such as music performances and a small but fun beer festival.

Eat: Norð Austur
For a town of Seyðisfjörður’s size, two good restaurants seems like a lot. Some think Norð Austur offers the best sushi in Iceland—try the immaculately presented sashimi platter to see why. It’s a small place that’s popular with both locals and tourists, so if it’s a weekend, call ahead and make a reservation.

Hike: Waterfall Lane
Seyðisfjörður is also the name of the beautiful fjord in which the town sits. Past the town sign—think a low-fi version of the Hollywood logo—there are fields, cliffs and waterfalls to explore, as well as disused ammo dumps and ruined houses from previous centuries. Waterfall Lane is a four-hour hike up the Fjardara river, with many waterfalls to see along the way. Be prepared: it’s a route that requires good boots and hiking poles.

Art: Tvisöngur
Tvisöngur is a sound sculpture by German artist Lukas Kühne. A short hike into the hills on the south side of the fjord leads to this series of five interconnected concrete domes, each one designed to amplify a different pitch. It’s a beautiful and improbable site that’s open to the public all year round.

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