[7] The first cannon was put on the trawler Þór in 1924 and on 23 June 1926 the first ship built for the Coast Guard, named Óðinn, arrived in Iceland.

[8] The Icelandic Coast Guard played its largest role during the fishing rights dispute known as the Cod Wars, between 1972 and 1976, when the Coast Guard ships would cut the trawl wires of British and West German trawlers, resulting in confrontations with Royal Navy warships and tugs from the British Ministry of Agriculture, Fisheries and Food (MAFF).

[12] Additionally the ICG is in the charge of defusing naval mines, most of which were laid during the Second World War,[13] and monitoring fisheries in international waters outside of the Icelandic economic zone in order to blacklist any vessel partaking in unregulated fishing and thus bar them from receiving services from any member of the North East Atlantic Fisheries Commission[14] in order to make unregulated fishing unprofitable.

The Icelandic Coast Guard also occasionally operates within Greenlandic and Faeroese waters, following a bilateral agreement with Denmark regarding mutual aid in security, rescue and defence matters.

The Coast Guard accomplishes these tasks with the use of offshore patrol vessels (OPV), helicopters, surveillance aircraft, satellites and a network of land based surface scanning radar.

The Coast Guard has also taken part in peacekeeping operations on behalf of the Icelandic Crisis Response Unit, although while usually using their own rank insignia, uniforms and weapons.

Týr and Þór are also equipped with sonar systems and the Ægir-class vessels have flight decks and a hangar for a small helicopter.

[citation needed] The coastguard has a 73-ton patrol and hydrographic survey vessel, named Baldur, built by Vélsmiðja Seyðisfjarðar shipyard in 1991.

[24][25][23] In 1972, the ICG, along with the National Life-saving Association of Iceland, bought its first specialized search and rescue helicopter, a Sikorsky S-62 that was named Gná, from the United States Coast Guard.

The helicopter performed admirably, including in March 1983, when Rán, along with a French Aérospatiale SA 330 Puma, one of two temporarily deployed in the country,[30] rescued 11 people from Hafrún ÍS-400 after it ran aground at Stigahlíð in the Westfjords.

[31] However, in November 1983, Rán crashed in Jökulfirðir in the Westfjords of Iceland during a training mission, killing its four man crew,[32] in what remains the deadliest accident in the ICG history.

The new helicopter continued on the success of Sif and gained national fame when it rescued 39 sailors in three separate incidents during a six-day period in March 1997.

This plane has been extensively modified by FIELD to carry a modern Mission Management System and suite of surveillance sensors, air operable door and communications/navigation equipment.