The municipality was formed by the merger of rural communities Berunes [ˈpɛːrʏˌnɛːs], Buland [ˈpʏːlant], and Geithellur [ˈceitˌhɛtlʏr̥] on October 1, 1992.

Approximately 900 m west of the town is a work of art named "Eggin í Gleðivík" [ˈɛcːɪn iː ˈklɛːðɪˌviːk] (The Eggs of Merry Bay) by Sigurður Guðmundsson.

Today, it is home to a café, the heritage museum and an exhibition on the Icelandic sculptor Ríkarður Jónsson, who was native to the village.

Approximately 5 kilometres west of Djúpivogur lies Teigarhorn [ˈtʰeiːɣarˌhɔ(r)tn̥],[3] a farm on the shores of Berufjörður, where weather observations began in 1874.

By the early nineteenth century, Djúpivogur was 'a tiny port with a Danish colonial trading base'.