The town was originally built on a farm called "Nes", settled by Egill Rauði ("the red").

Then it was connected through a 626-meter long single-lane tunnel that passed through the Oddskard mountains called Oddskarðsgöng.

The building of an aluminum smelter and a new hydroelectric power-plant in East Iceland in 2003 reinvigorated the local economy.

According to some accounts, the first small-scale avalanche actually occurred on 19 December; however, due to low visibility, no-one noticed it.

The art gallery displays a number of paintings by Tryggvi Ólafsson - one of Iceland's most celebrated contemporary artists.

The natural history museum hosts an interesting collection of Icelandic mammals, shellfish, birds, insect and stones.

The maritime museum houses a number of fishing and boat related old equipment from Josafat Hinriksson family.

The town hosts a three-day metal, hardcore, punk, rock and indie music festival, Eistnaflug, in July.