The town is a centre of commerce and small industries with a population of around 10,000 (2023), making it the largest residential area in South Iceland.

Selfoss was settled by Þórir Ásason sometime after 1000, but the sagas of Icelanders mention that Ingólfur Arnarson was there during the winter of 873-74, under the Ingólfsfjall mountain, which is west of the Ölfusá river.

In the summer of 1891, due to the lobbying of Tryggvi Gunnarsson, a member of the Alþing, the first suspension bridge was built over the Ölfusá.

Today, with more efficient transportation, Selfoss benefits from its proximity to the Reykjavík area and is predicted to grow further in the coming years as businesses and residents relocate to the town because of lower property prices.

[2] It enjoys low rates of unemployment and is the home of one of the largest colleges in the country; FSU Fjölbrautaskóli Suðurlands.

In early August, the town holds a festival called "Sumar á Selfossi", meaning "Summer in Selfoss".

Local residents decorate their gardens with ribbons, coloured according to neighbourhood, and a fete is held on the public grassland behind the civic library.

The fete involves the selling of homemade goods on small stalls, performances by musicians and magicians on a temporary stage and in the evenings, the revelry continues with large bonfires and free fireworks display.

[3] According to the United States Geological Survey, an earthquake with a moment magnitude of 6.3 occurred near Selfoss on the afternoon of Thursday 29 May 2008, causing considerable damage to some buildings and roads.

Since 2011, the town was also made world famous for hosting the Iceland's Strongest Man competition, which was initially broadcast via television channel Stöð 2.

The bridge over the Ölfusá river, called Ölfusárbrú, is an important link in southern Iceland, and the genesis of the town's location.

Similar to the rest of the southern coast of Iceland, Selfoss has a subpolar oceanic climate (Köppen: Cfc) with cool summers and cold winters, although relatively mild for its high latitude.