With a population of about 2,600, Ísafjörður is the largest settlement in the peninsula of Vestfirðir (Westfjords) and the administration centre of the Ísafjarðarbær municipality, which includes—besides Ísafjörður—the nearby villages of Hnífsdalur, Flateyri, Suðureyri, and Þingeyri.

Witch trials were common around the same time throughout the Westfjords, and many people were banished to the nearby peninsula of Hornstrandir, now a national nature reserve.

The former Danish trading post Neðstikaupstaður, established in the 18th century, contains the oldest collection of timber frame houses in Iceland.

These include Krambúð (1757[1]), Faktorshús (1765[2]), now the Danish consulate, Tjöruhúsið (1781[3]), now a restaurant, and the site of the Westfjords Heritage Museum Turnhúsið (1784[4]).

The tourist industry is growing; it is a major access point to the nature reserve on the Hornstrandir Peninsula, an uninhabited wilderness area to which ferries run weekly during summer.

A yearly festival, Aldrei fór ég suður, provides a platform for local musicians and bands from around Iceland and even from overseas.

The name Aldrei fór ég suður[15] (I never went south) is taken from a Bubbi Morthens song of the same name, and may refer to a movement among young Icelanders to establish cultural events outside Reykjavík, and draw attention back to the nation's roots in the countryside.

Notable past participants include renowned cellist Erling Blöndal Bengtsson, pianist Vovka Ashkenazy, and the acclaimed Pacifica Quartet.

In 2007, clarinetist and composer Evan Ziporyn, a member of the celebrated group Bang on a Can, led a master class and performed in Ísafjörður.

The festival has also hosted unique and collaborative performances by Decoda, an affiliate ensemble of Carnegie Hall, and the innovative Orchester im Treppenhaus from Germany.