Icelandair, the national carrier, has regular and direct flights to Europe and the USA. While some bargain fares do exist, flying to Iceland is generally expensive: to keep transport costs down, plan as far in advance as possible, shop around for cheap fares, and purchase airline tickets at least 30 days prior to departure. A pleasant way to travel between Europe and Iceland is by ferry, although it takes a bit more time and the costs are still high. A ferry service operates from late May to early September out of Hanstholm in northern Denmark (passengers are required to spend two nights in the Faroe Islands en route).

Air Iceland (Flugfélag Íslands), Iceland's main domestic airline, provides the only reliable transport in winter when snow and ice inhibits most overland travel. In summer, the airline has rather expensive daily flights between Reykjavík and most major destinations. Iceland has no railways and its highway system is Europe's least developed. However, Bifreiðastöd Íslands, a collective organisation of long-distance bus lines, does a tidy job of covering the country with a feasible, though inconvenient, network. There are also a number of ferry services connecting ports.

Car-rental agencies are found in most major towns, and rates are almost bearable until you add excess kilometres, compulsory insurance and some of the world's most expensive petrol to the price. With its unsurfaced roads, steep hills and inclement weather, Iceland is hardly a cyclist's dream. Nevertheless, an increasing number of visitors are trying it, and bikes can be rented in most urban centres, hotels, hostels and guesthouses. Local transport includes taxis, which can also be hired for sightseeing, and municipal buses.