Still, it has been formed over thousands of years by different influences of fire (volcanic eruptions of Öræfajökull) and water (the glaciers Skeiðarárjökull [ˈsceiːðarˌaurˌjœːkʏtl̥] and Skaftafellsjökull), the rivers Skeiðará, Morsá [ˈmɔr̥sˌauː] und Skaftafellsá [ˈskaftaˌfɛlsˌauː].

Volcanic eruptions under the ice cap can give rise to jökulhlaups (glacial floods) which swell the Skeiðará River massively.

The sandy wasteland between the glacier and the sea caused by jökulhlaups is called Skeiðarársandur and is a typical outwash plain known locally as a sandur [ˈsantʏr̥].

In the Middle Ages there were a number of large farms in this area, but they were abandoned after two volcanic eruptions and the ensuing glacier runs.

Soon after Iceland was settled, Skaftafell became a major farm, and area meetings (þing [ˈθiŋk]) were held on its land.

In earlier times, however, the farmers had supplemented sheep farming by trips to the coast, where they hunted seals and collected eggs.

Stranded ships provided excellent material for making various items, and some of the Skaftafell farmers became well known for their crafting talents.

The rivers running from it have flowed back and forth over the lowlands, depositing the material that forms the wide sands of Skeiðarársandur.

Compared to many south coast areas, Skaftafell has a mild, pleasant climate, often benefiting from the towering shelter of Öræfajökull.

Since sheep stopped grazing at Skaftafell, the vegetation has undergone great changes and is quickly making inroads on the glacial deposits in front of Skaftafellsjökull and in Morsárdalur valley.

Down in the Skaftafell woods, the redwing, redpoll, and wren are common, while the snipe, ptarmigan, golden plover, and meadow pipit, appear more frequently higher up the slopes.

Although the sole wild mammals are the Arctic fox, mink and field mouse, the local insect fauna is considered quite diverse compared to most of Iceland.

In recent decades, Skaftafell and the Öræfi district has shifted from a dependence on sheep farming to large-scale tourism.