Iceland sits astride the middle of the Mid-Atlantic Ridge, which is an integral part of the global mid-oceanic ridge system. This ridge is a 40.000 km crack in the ocean floor caused by the separation of the North American and Eurasian tectonic plates. The Mid-Atlantic Ridge has made Iceland into a landmass between the submarine Reykjanes Ridge to the southwest and the Kolbeinsey Ridge to the north, and has been active during the last 20-25 million years, broadly coinciding with the time-span of active volcanism in Iceland.

Accordingly, the western part of Iceland, to the west of the volcanic zones, belongs to the North American plate and the eastern part to the Eurasian plate. Where plates meet, they can rub against each other as they slide in opposite directions; they can collide head-on in a stalemate, pushing each other up or down like two fighting rams; or one might win out and push the other one beneath it. Sometimes, they only move away from each other, releasing pressure and exposing the lava sea between them. This allows the lava to stream to the surface, where it cools down and forms new land. When this happens, the area of separation is called a "constructive junction," and this is precisely what is happening in Iceland.

Volcanic eruptions and earthquakes follow each other. Parts of Iceland are frequently shaken by earth tremors. Catastrophic earthquakes occur at longer intervals than the volcanic eruptions. Some of the worst earthquakes devastated large areas of southern Iceland in 1784 and 1896. There are over a hundred volcanos on the central plateau which have not erupted in the past thousand years and between 30 and 40 that areactive, meaning that they have erupted within last few centuries.

On average, Iceland experiences a major volcanic event once every 5 years. Since the Middle Ages, a third of all the lava that has covered the earth's surface has erupted in Iceland. However, according to a recent geological hypothesis, this estimate does not include submarine eruptions, which are much more extensive than those on the land surface. The most famous and active volcano in Iceland is mount Hekla, which has erupted 18 times since 1104, the last time in 2000. Other active volcanos, measured in terms of the number of eruptions besides Hekla, are Grímsvötn, Katla, Askja and Krafla. Katla, has erupted about 20 times since the settlement of Iceland.

A volcano in Heimaey in the Vestmannaeyjar Islands off the south coast, which was thought to be long extinct as it had not been active for about 5,000 years, suddenly erupted in 1973. Heimaey is the largest of the Vestmanneyjar Islands, and the only one that is inhabited. The fishing town of Heimaey, with a population of 5,300, was only 200-300 m away from the eruption, which began without warning in the volcano Eldfell during the night of 23 January Nearly all the inhabitants were evacuated to the mainland by fishing boats and aircraft during the first night. Only a few hundred people stayed behind to carry out necessary work.

The eruption lasted 5 months and the village was nearly destroyed by lava, ash and fire. Miraculously, two-thirds of Heimaey was saved by using barriers and huge jets of water to cool the lava, which in turn created a rock damn against the flow. Ironically, by the time the eruption was over, the town's harbour was even better than before - the new land provided greater protection from wind and water. After the end of the eruption, people started to move back and the population is now about 4,900.

A typical submarine eruption occurred on the Reykjanes Ridge in 1963, resulting in a new island, Surtsey, which forms part of the same archipelago as Heimaey. It emerged from a depth of 130 m during an eruption which lasted until 1967. At its largest, this new island had an area of 2.8 km², but has now been reduced reduce by wave action to 1,5 km². At numerous times in Iceland's history, volcanos have meant disaster. The largest recorded lava flow in world history occurred here in the summer of 1783, when a 25-km crater row, Lakagigar, southwest of Vatnajökull, poured out 14 km3 of lava, the greatest lava flow witnessed on Earth, at least in the last millennium. So much ash was released that the sun was obscured for a time, and hundreds of thousands of sheep and cattle perished from the poisonous gases. The ensuing famine led to the death of 20% of the population, or about 10,000 people. The lava-field created by the eruption covered 580 km², with a total volume of 12 km³. During the summer of 1783, a bluish haze from the eruption covered Europe and Western Asia, causing difficulties in agriculture there. This was one of the reasons for the 1789 revolt in France. 

The same geological activity that creates the volcanos provides an endless supply of geothermal energy. Over 90% of housing in Iceland I is heated by natural geothermal heat - one of the cheapest and cleanest forms of energy in existence. Hot springs can be found almost everywhere, and the melt water created by sub-glacial volcanos provides the country with a huge potential source of of hydroelectric power. All this clean energy has made Iceland one of the least polluted countries in the world.