A chronology of key events:
870s - First Norse settlements on Iceland. Previous inhabitants were a small number of Irish monks.
Tradition says 'Bay of Smoke' was founded in 874
- Became administrative centre in 1786
- Capital of independent Iceland from 1944
- Population: 112,000
930 - An annual parliament - the Althing - established, to make laws and solve disputes.
986 - Erik the Red takes settlers from Iceland to colonise Greenland.
1000 - Iceland adopts Christianity. A golden age of Icelandic culture begins, producing great works of medieval literature.
1262-4 - Icelanders recognise the King of Norway as their monarch.
1380 - Norway and Iceland enter a union with the Danish crown.Plague and death
1402-04 - Plague hits Iceland, killing half the population. The plague returns in 1494-5 with similar fatalities.
1550 - Catholic bishop, Jon Arason, captured and beheaded in his northern diocese. This marks the final victory of the Lutheran Reformation in Iceland.
1602 - Denmark assumes a monopoly on all Icelandic trade. This continues for around 200 years.
1700s - A period of decline in Iceland, with disease, famine and a volcanic eruption in 1783 reducing the impoverished population from 50,000 to 35,000.
1814 - Norway enters union with Sweden; Iceland remains under Danish rule.
1845 - The Althing meets again in Reykjavik.Moves towards autonomy
1848 - Denmark's monarch renounces his absolute power; Denmark prepares to become a representative democracy. This raises questions about Iceland's status.
1874 - Iceland given limited autonomy; the Althing has power over internal affairs.
1904 - Iceland attains home rule; rule by parliamentary majority introduced. The country experiences rapid technological and economic progress. University of Iceland established in 1911.
1918 - Iceland achieves full self-government under the Danish crown. Denmark retains control over foreign affairs only. The treaty is valid until 1943.War and independence
1940 - German forces occupy Denmark. British forces occupy Iceland.
1941 - The United States takes over the defence of Iceland and stations tens of thousands of troops there.
1943 - The Treaty of Union with Denmark runs out, with Denmark still occupied by Nazi Germany.
1944 - Icelanders vote in a referendum overwhelmingly to cut all ties with Denmark and become a republic. The Republic of Iceland is proclaimed on June 17th.
Iceland becomes a member of Nato.
1958 - First "Cod War" as Iceland extends its fishing limit to 19 kilometres.
1970 - Iceland joins European Free Trade Association (EFTA).
1972 - Iceland extends the fishing limit to 80 kilometres. Renewed confrontation with Britain.
1975-6 - Third "Cod War" as Iceland extends its fishing limit to 320 kilometres.
1980 - Vigdis Finnbogadottir becomes first woman president of Iceland.
1980s - Iceland suffers from high inflation, averaging 38% annually.
1985 - Iceland declares itself a nuclear-free zone.
1991 - David Oddsson elected prime minister.
1992 - Iceland leaves International Whaling Commission (IWC) in protest at what it sees as the IWC's anti-whaling stance.
1996 - Olafur Ragnar Grimsson elected president.Whale hunting question
2001 - Iceland applies to rejoin IWC but is granted only observer status because, after a gap of 12 years, it says it has plans to resume commercial whale hunting despite an IWC moratorium.
Iceland's pop princess
Singer Bjork had a top selling album at the age of 11
2002 October - IWC votes by narrow margin to readmit Iceland as a full member, despite the country's plans to resume hunting for what it terms research in the near future and limited commercial hunting after 2006.
2003 May - David Oddsson continues as prime minister in coalition government following elections.
2003 August - Iceland embarks on its first whale hunt for 15 years, with a "scientific catch" to study the mammals' impact on fish stocks.
2004 June - Olafur Ragnar Grimsson re-elected president.
2004 September - David Oddsson hands over premiership to former foreign minister Halldor Asgrimsson.
2004 November - Grimsvotn volcano erupts, scattering ash as far away as Finland and causing aircraft to divert. The volcano is in a remote part of the island and there are no casualties.
2006 June - Prime Minister Halldor Asgrimsson resigns after his party's poor performance in local elections and amid concerns about the economy. He is succeeded by Geir Haarde.
2006 - The last US military personnel leave the Keflavik base, ending a military presence dating back to 1951. The US says it will defend Iceland as a Nato ally.
Bobby Fisher 1943-2008
Bobby Fischer's 1972 Reykjavik clash with Boris Spassky made him a hero in Iceland
2006 October - Iceland breaks its 21-year moratorium on commercial whaling; the fisheries ministry authorises a catch of 30 minke and nine fin whales.
2006 December - Population grows 2.6% in past year. Officials attribute this to immigration, encouraged by the rapidly growing economy.
2007 April - Iceland and Norway agree to expand defence cooperation to help secure future shipments of oil and gas.
2007 May - The governing coalition holds on to its majority in parliament by a single seat in general elections. The Progressive Party leaves the coalition with Geir Haarde's Independence Party. It is replaced by the Social Democratic Alliance, which gives Mr Haarde a much larger majority.
2008 January - Controversial US-born former world chess champion Bobby Fischer dies aged 64 in Iceland. A popular figure in Iceland, he had been granted citizenship to prevent Japan from extraditing him to the US.Financial crisis
2008 April - The government warns that it may intervene in the country's currency and stock markets to fight hedge funds that it says are attacking Iceland's financial system.
2008 October - The government takes over control of all three of Iceland's major banks in an effort to stabilise the financial system, which has been hit hard by the global financial crisis.
The 2008 crash of Iceland's banking system sparked angry protests
Weeks later, Iceland applies to the International Monetary Fund (IMF) for emergency financial aid - the first western country to do so since 1976.
2008 November - IMF approves $2.1bn (£1.4bn) loan to help Iceland through its financial crisis.
2009 January - Prime Minister Geir Haarde calls a general election for 25 April, two years early. The move comes after demonstrations calling on the governing coalition to resign over the country's economic meltdown.
Days after calling the election, Prime Minister Haarde announces the immediate resignation of the government, following the breakdown of talks with his coalition partner, the Social Democrats.
Social Democrat Johanna Sigurdardottir takes over as prime minister, at the head of a centre-left coalition with the Green-Left party.
2009 April - PM Johanna Sigurdardottir's centre-left coalition wins majority of 34 out of 63 seats at parliamentary elections.EU application
2009 July - Iceland formally applies for EU membership after parliament votes in favour of accession.
EU foreign ministers ask European Commission to begin assessing Iceland's readiness for membership, opening accession proceedings.
2010 February - Unemployment soars to over 15,000 (over 9% of work force) - up from just over 1,500 (1% of work force) at the beginning of 2008, before the financial crisis took hold.
2010 eruption of Eyjafjallajokull volcano generated huge excitement - and travel disruption across Europe
2010 March - Voters overwhelmingly reject a referendum proposal to pay the UK and the Netherlands 4bn euros (£3.4bn) worth of compensation for the collapse of the Icesave bank.
The Eyjafjallajokull glacier in southern Iceland starts a massive eruption, creating an ash cloud that disrupts flights throughout Europe for several months.
2010 April - The IMF clears a further $160m (£104m) tranche of the aid package granted in 2008 but delayed by wrangling over compensation for the Icesave collapse.
2010 July - Formal talks on Iceland's EU accession begin.
2010 December - Government agrees new deal to repay the UK and the Netherlands the 4bn euros (£3.4bn) they lost when the Icesave bank collapsed in 2008. Under the new settlement, repayments will be completed by 2046.
Iceland says it will unilaterally increase its mackerel fishing quota by nearly 17,000 tonnes in 2011.
2011 - Economy registers first signs of growth in response to austerity programme and unemployment begins to fall fast.
2011 February - Parliament approves new deal to settle UK banking dispute with UK and Netherlands, which voters reject in April.Economic recovery
2012 February - The credit rating agency Fitch raises Iceland's sovereign rating to BBB-, which makes the country once again fit for investment.
2012 April - Former Prime Minister Geir Haarde is found not guilty of negligence in his trial over his handling of the 2008 financial crisis.
2012 July - President Grimsson wins a record fifth term in office.
2012 September - IMF praises Iceland's economic recovery.
2013 January - A European court clears the government of failing to guarantee minimum compensation for British and Dutch savers.
Iceland awards two licences for oil and gas exploration and production to Faroe Petroleum and Valiant Petroleum, with Norway taking a 25% stake in both.
2013 April - The opposition Eurosceptic and centre-right Progressive and Independence parties win parliamentary election in backlash against Social Democrats' austerity measures.
2013 May - Progressive and Independence parties form a coalition government. They promise to hold a referendum on whether or not to proceed with Iceland's EU membership negotiations.
2013 December - Four former bosses of the Kaupthing bank are given prison sentences for market abuses just before it collapsed in the 2008 financial crisis.
2014 February - Britain and the Netherlands file a claim of nearly $5bn (£3bn) over money their savers lost in the 2008 collapse of the Icesave bank.
The centre-right coalition government says it will withdraw Iceland's application for EU membership without holding a referendum, despite a poll suggesting 80% of Icelanders want a vote.