It is situated on the western side of the Skagi peninsula, along the east coast of the Húnaflói ('Húna Bay').

Measuring just 49.4 square kilometres (19.1 sq mi), it is the sixth smallest municipality in Iceland by land area.

On the northwest edge of the village is the Spákonufellshöfði ([-ˌfɛlsˌhœvðɪ]; 'Headland of the Spákonufell'), a 22.5 hectares (0.225 km2; 0.087 sq mi) nature preserve and park.

'[5] Skagaströnd originally referred to the entire shoreline extending from the northern tip of the Skagi peninsula to the mouth of the Laxá í Refasveit (also called Laxá-Ytri),[6] a small river that empties into the Húnaflói 8 km (5.0 mi) north of Blönduós.

The area historically hosted a number of verstöðvar, traditional fishing outposts and communal mooring places.