Iceland, except for the capital of Reykjavik, is not big on public transport. If you wish to explore Iceland in a week, driving through Iceland is the best choice. You'll get to adjust your trip as you go along and spend more time where you want. And you'll get to explore hidden areas off the typical tourist track.
Just know you will be driving (and seeing) a lot and the towns are few and far between. However, it is a stunning road trip well worth it. The landscape of Iceland is just breathtaking. Chances are, you'll come across Icelandic wild horses and more natural beauty that you've ever seen before.
Day 1: Arrival in Reykjavik, Iceland
You can rent a car directly from Keflavik airport, but Reykjavik is only a short drive from the airport and a good place to start your journey and gather yourself. You can use the first day to explore the best attractions of Reykjavik. The capital is hip, eclectic and trendy, with friendly pubs, clubs, and cozy restaurants in the downtown area. The area is rich in historical landmarks and museums. If you arrive early in the day, book a 2 1/2 guided tour of the city.
Day 2: Þingvellir National Park
Þingvellir National Park is a short trip from Reykjavik, thus slowly easing you into your journey. The park is a place of great beauty, one of the many you will see on your way. The park is a UNESCO World Heritage Site. It is also home to the great Strokkur Geyser which erupts about every 8 minutes. It truly is a sight to behold. Gullfoss Waterfall, one of the most impressive in Europe, and also belonging to the Queen, is about a 60-kilometer trip, but well worth your time if you don’t mind a detour. Exploding geysers are in abundance in this area. Stay in one of the more affordable hotels in Arborg, half an hour south of the park.
Day 3: Jökulsárlón Lagoon and Höfn
Get an early start to reach Höfn, which is roughly 400 kilometers away (or about 4 1/2 hours). On the way there, be sure to stop at the impressive glacier lagoon Jökulsárlón. It is an absolute must see. You will drive past Iceland's famous black basalt beaches, as well as small villages, cliffs, and glaciers until you finally reach the fishing village of Höfn. The lobster dinners at the small local restaurants are to die for if you want to enjoy a typical meal. There are B&Bs and hotels in and around Höfn.
Day 4: Lake Mývatn
This is a day of true and pure Icelandic nature. From Höfn, you will travel north-eastward, towards a mountain-rich wilderness surrounded by extinct volcanoes, passing the spectacular East Fjords of Iceland. If you have time to spare, stop at Námaskarð pass for the boiling mud pools. At Lake Mývatn, you can enjoy a bath in the thermal springs right in the open air. The entire area is known for its rich bird life and biodiversity, so keep an eye out for flocks of colorful puffins while driving from one stop to the next. Myvatn has affordable hotels and guesthouses.
Day 5: Akureyri
Akureyri is considered to be Iceland's capital of the North. To get here after Day 4, it is a short drive of 90 kilometers. Welcome to a relaxing day in a small city very close to the Arctic Circle. You can spend the day horse riding, exploring the city, or white water rafting. Plan a visit to the small historic church at Víðimýri and a stop at the old turf and stone farm. The town itself boasts a Botanical Garden, and various museums and art galleries, making it the perfect place to rest before your journey back to Reykjavik.
Accommodation is scattered along the way if you don't feel like booking ahead. You also have the option of spending a second night in Akureyri after Day 5 before coming here or getting here early and then continuing on to Reykjavik in the evening of Day 6 to spend the night there. Regardless of whether you wish to push through to Reykjavik or not, you have to stop at the Fjord. This leg of our driving tour also takes us to the famed Blue Lagoon, your final stop enjoying a relaxing natural bath before heading home. Do NOT rush this leg of the trip. Coming down from Akureyri offers spectacular views and scenery. Along this stretch of road, you may also encounter wild Icelandic horses.
Day 7: Return to Reykjavik
The capital of Iceland is only 45 kilometers from Hvalfjordur Fjord, so you get to spend a relaxed day here, absorbing all you have seen, while comfortably preparing for your flight back. Use this time to further explore the city if you wish, and enjoy a good farewell meal, Icelandic style. Drop off your rental car and take one of the airport shuttles to Keflavik Airport if needed.