It is located on the coast of Dýrafjörður fjord in the mountainous peninsula Westfjords (in Icelandic written Vestfirðir).

Continually inhabited since 1787,[1] Þingeyri is one of the oldest settlements in the Westfjords[2] and the first trading post established there.

In the 19th century the French applied for permission to establish a base there to support their fishing operations in the area but were turned down.

[5] In 1995, the inhabitants of Þingeyri voted in favor of a merger with Ísafjörður, Suðureyri, Mýrahreppur, Mosvallahreppur and Flateyri to form the new municipality of Ísafjarðarbær.

[citation needed] The nearby mountain of Sandafell, accessed by driving or hiking, is a tourist destination known for its scenic view.