Around 1000, Iceland initially converted to Christianity in a partial and diplomatic way. The compromise measure came about due to the Norse-pagan Þorgeirr Ljósvetningagoði and is also dealt with in the article on the Íslendingabók. In the compromise, the old laws allowing Infanticide and eating horsemeat would stay. Pagan sacrifices remained legal if they were done in private. However, in public and officially, the nation became Christian. This was in part to please the Christianized kings of Norway, a main trading partner for Medieval Iceland, and in part to satisfy Iceland's growing Christian faction. Over time, the allowances for paganism dwindled, then disappeared.
Still their relationship to the rest of Christendom remained strained for the first few centuries. The Catholic Church officially disproved of several variance they had from the rest of the Christian world. For example, the Althing could, and did in cases like Jón Ögmundsson, vote to make someone a saint. Although the standards of canonization were not yet regularized, this was considered unusual. Added to that, the Church was subservient to the chieftains as churches were often on their land. The priests often had concubines or were themselves children of concubines. Lastly, the convent was often made up of older widows of wealthy Icelanders. This meant a nun could, and sometimes was, both widow of a previous bishop and mother of the current one. This gave nuns an unusual position.
Two bishoprics were established in Iceland, one at Skálholt (created 1056) and one at Hólar (1106). These became Lutheran during the Reformation, and were later amalgamated in 1801 into a single diocese under the Bishop of Iceland in the Lutheran Church of Iceland.
The Reformation proved to be more violent in Iceland than in most of the lands ruled by Denmark, partly from Arason's proto-nationalistic resistance, which escalated nearly to the point of civil war. Though he succeeded for a time, he was betrayed and executed on November 7, 1550.
With the bishops gone, a religious transition was inevitable. Following the usual pattern of the Reformation, Catholicism was outlawed and loyal Catholics persecuted. Meanwhile, the rulers of the land pounced upon Church property and divided the loot among themselves and their supporters. Though Latin remained the official language of the Lutheran Church of Iceland until the year 1686, and a good part of the former Catholic terminology and other externals were retained, the doctrinal substance was obviously very different. Moreover, the rigorous laws of Denmark, which were enforced in Iceland, prohibited, under severe penalties, the celebration of Catholic services. For more than three hundred years, no Catholic priest was permitted to set foot on that soil.
The Catholic Church established on December 8, 1855 a jurisdiction under the name Prefecture Apostolic of the North Pole (Praefectura Apostolica Poli Arctici) that included Iceland. Several years later, the two French priests Bernard Bernard (1821-1895) and Jean-Baptiste Baudoin (1831-1875) settled in Iceland in 1857 and 1858 respectively. They met with a difficult reception and in 1862, Bernard left the country, while Baudoin persevered until 1875. On August 17 1869, Pope Pius IX set up Prefecture Apostolic of Denmark, to which Iceland passed. Freedom of worship was enacted in 1874. After an interval, Catholic missionary efforts were resumed, with church, school and even a hospital run by nuns by the turn of the century.
The former jurisdiction became a Vicariate Apostolic of Denmark on March 15, 1892. Thereafter, the island territory became for the Catholic Church an independent unit, first as the Prefecture Apostolic of Iceland on June 23 1923 and then, not many years later, on June 6, 1929, as the Vicariate Apostolic of Iceland. It was on October 18, 1968 that this entity matured into the Diocese of Reykjavik. Even though the Catholic population remains small as a percentage of the overall population and in absolute numbers, it grew from about 450 in 1950 to 5,590 in 2004, during which time the total population grew from 140,000 to 290,000.
This led to encouraging a certain dourness to Iceland by discouraging dancing or other entertainments.
In the twentieth century, Iceland had some notable, if at times temporary, converts to the faith. For a time Halldór Laxness was Catholic. Although this did not last, his Catholic period is of importance due to his position in modern Icelandic literature. A more consistently Catholic writer in Icelandic was Jón Sveinsson. He moved to France at 13 and became a Jesuit. He remained in the Society of Jesus for the rest of his life. He was well-liked as a children's book author (writing in German) and even appeared on postage stamps.
That said, growth has been static for ten years and the Adventists tend to indicate this is caused by the generalized secularism of the nation. The group represents less than .3% of the population.
Michelle Harrison and the Nannini family are missionaries serving with the First Baptist Church. The Baptist Church building is located on the southern peninsula of Iceland in Njarðvík, where some 25,000 people live. Weekly attendance (75% of which is youth) is usually 80–120 people (despite only 30 being registered). Although the registry lists only one Baptist church, Jeremy Gresham and Andy Hansen are Baptist missionaries who have seen a Baptist work begin in Garðabær, a suburb of Reykjavík.
The National Registry (see below) estimates them at over twice that number.Eastern Orthodoxy, both Serbian and Russian, has a small presence on the island. Various other Christian denominations are represented with fewer than 1,000 registered adherents.
has a membership of just over 400, governed by 13 Local Spiritual Assemblies. This is the highest percentage, by population, in all of Europe, even though the Bahá'í Faith, having been introduced to Iceland by American Amelia Collins in 1924, was only recently established in Iceland (1972). This relatively high rate is not reflected in other Nordic countries. Danish scholar of religion Margit Warburg speculates that the Icelandic are culturally more open to religious innovation.
There was no significant Jewish emigration to Iceland until the twentieth century, though some Jewish merchants lived in Iceland temporarily at times during the nineteenth century. Icelanders' attitude toward the Jews has ranged from sympathy for their plight to blaming them for "Bolshevism", among other things. Although most Icelanders deplored their persecution, they usually refused entry to Jews who were fleeing Nazi Germany, so the Jewish population did not rise much during the Second World War. 
Today the Jews remain a minor element of Iceland. Up to 60 people do attend occasional Jewish holiday parties or lectures by Jewish immigrants, but this does not necessarily reflect the actual Jewish population. The World Jewish Congress had no figures for Iceland in 1998, suggesting that the numbers are under 120 (and likely well under that figure).
The web site for the Catholic diocese indicated there are only 30 Jewish people in Iceland
, but as their estimate of Muslims is unusually low they might be underreporting Judaism as well. Still, it seems that, save for the European micro-states, Iceland might have the lowest Jewish population of any European nation.
Despite the small population, the First Lady of Iceland, Dorrit Moussaieff, is a Bukharian Jew and is likely the most significant Jewish woman in Icelandic history. Moussaief was born in Israel and carries both Israeli and Icelandic citizenship. She still follows some aspects of Judaism – lighting, for example, the first candle of the menorah on the eve of Hannukkah and teaching her husband about the holiday.
She has introduced Jewish culture to the country in a positive way in order to counter anti-Semitism.
Only eleven percent of Icelanders "don't believe in any sort of spirit, God, or life force", according to a 2004 Eurobarometer study Social Values, Science and Technology.
This is lower than in Norway or the United Kingdom, while expressed belief in God was about the same in Iceland as in the UK and higher than in most of Scandinavia. The majority of Icelanders preferred to express belief in a "spirit or life force" rather than in God or a generalized disbelief.
Siðmennt
is the largest organization promoting secularism in Iceland. It is similar to the Human-Etisk Forbund in Norway, although it only claims a membership of "well over 200" members (0.06% of the Icelandic population), a far lower proportion of the nation than the Norwegian organization. Unlike the Human-Etisk Forbund, Siðmennt is not recognized as a religious community by the state and thus does not receive any funds from the state like registered religious organizations do. People outside religious organizations still pay the "church tax" but the money goes to the University of Iceland.
There are other Icelandic instutitions for the secular branches within society, such as the SAMT or Samfélag trúlausra. Vantrú is a vocal association of atheists that criticizes all things supernatural. Skeptíkus is an association of atheists on the University of Iceland campus.
| Religious group | number | % of population |
|---|---|---|
| Christian organisations: | ||
| Church of Iceland | 252,461 | 80.7 |
| Reykjavík Free Church | 7,498 | 2.4 |
| Hafnarfjörður Free Church | 5,024 | 1.6 |
| Reykjavík Independent Church | 2,768 | 0.9 |
| Roman Catholic Church | 7,977 | 2.5 |
| Pentecostal Church | 1,963 | 0.6 |
| Seventh-day Adventist Church | 757 | 0.2 |
| The Way, Free Church | 734 | 0.2 |
| Jehovah's Witnesses | 682 | 0.2 |
| The Cross | 669 | 0.2 |
| The Icelandic Christ-Church | 249 | 0.1 |
| Parish of St. Nicholas of the Russian Orthodox Church | 200 | 0.1 |
| The Church of Jesus Christ of Latter-day Saints | 178 | 0.1 |
| Serbian Orthodox Church | 167 | 0.1 |
| Kefas - Christian Community | 158 | 0.1 |
| Betania | 155 | 0.0 |
| The Church of Evangelism | 94 | 0.0 |
| Sjónarhæð Congregation | 59 | 0.0 |
| First Baptist Church | 28 | 0.0 |
| The Believers' Fellowship | 33 | 0.0 |
| Homechurch | 11 | 0.0 |
| Other religious groups: | ||
| Asa Faith Society | 1,149 | 0.4 |
| Reykjavíkurgoðorð (Asa Faith) | 20 | 0.0 |
| Buddhist Association of Iceland | 758 | 0.2 |
| Bahá'í Faith | 399 | 0.1 |
| Muslim Association | 371 | 0.1 |
| Zen in Iceland - Night Pasture | 68 | 0.0 |
| Family Federation for World Peace and Unification International | 4 | 0.0 |
| Other and not specified | 19,524 | 6.2 |
| Outside religious organizations | 8,714 | 2.8 |
According to the most recent Eurobarometer Poll 2005,