Certain places in the world are refreshingly eccentric. Perhaps it has to do with extreme geography or the metaphysics of a divergent genetic code, but Reykjavík is unquestionably at the epicentre of a wildly creative vortex. Is it really necessary to invoke Björk and her crazy woolly pompadour? Without fanfare, she thinks nothing of kicking off a karaoke marathon to raise awareness about the ownership of Iceland's natural resources. Ambient post-rock group Sigur Ròs recently launched their long-awaited live album Inni despite being on permanent hiatus. (Lead singer Jónsi Birgisson dressed up in feathers and perched around town like a pigeon for his debut solo music video.) Other artists seek inspiration in lava flows and dried stalks of rhubarb. The Reykjavík Art Museum keeps the narrative tradition of the Icelandic sagas alive with storytelling workshops and other participatory happenings. On the street level, this vibe manifests in graffiti murals and pop-up installations. Ordinary folk turn their window sills into quirky dioramas: a troll-doll fashion show, a collection of stuffed puffins, gambolling garden gnomes. The island republic's capital has more independent book and vinyl record stores than multiplex cinemas. Poetry slams are standing-room-only at the four public libraries. Knitting isn't just for grannies: it winds up in galleries. The incumbent mayor, comedian-turned-politician Jon Gnarr, had the city's coat of arms tattooed on his arm after taking office. The city council is dominated by other Best Party members who, like Gnarr, belong to the punk rock community. Pets are welcome everywhere, and yes, that includes horses.
Compared with other European cities, Reykjavík barely registers as urban, even though more than half of Iceland's population resides in its greater metropolitan area. Set on a south-western peninsula, it is bounded by deep fjords and a stark mountain range riddled with volcanic thermal vents. A waterfront promenade wraps around most of the low-rise neighbourhoods; on days when the wind blows in the right direction, the air is sharply flavoured with kelp and sea salt. The city's public beach, Nauthólsvík, is tempered by a redirected hot spring that flows into the chilly bay. The commercial centre is concentrated along a high street lined with galleries and coffee houses. Whale steaks, putrefied shark and reindeer often show up on restaurant menus. The hot dogs taste different (they're made with lamb). Boutiques sell romantically draped woollens - jumpers, mittens, ball gowns - fashioned from super-warm Icelandic wool. Even the fleecy long underwear is sexy.
The Arctic Circle is fewer than two degrees farther north so locals make the most of their brief but glorious summer, soaking up the 24-hour daylight while picnicking in city parks and spilling out onto the footpaths from downtown bars, Viking lagers in hand. In winter, the long darkness is illuminated by brilliant cosmic displays when the aurora borealis shimmers above the fjord. The city was once considered merely an optional stopover on the hippie grand tour, and it's still easy to dash through the place in a day, but that would be seriously underestimating Reykjavík's bohemian charm. It's quite possibly the best party in Europe.
STAY 101 Hotel Who really wants to sleep through the midnight sun? Reykjavík has several stylish places where you can employ those free in-flight eyeshades when your head finally hits the pillow. This art-filled hotel is the most fashionable, with a fireplace in the lobby and Icelandic grey wool throws on the downy beds. Hverfisgata 10, +354 580 0101.
Hotel Borg A beautifully appointed art deco landmark on the downtown square, Austurvöllur, which faces parliament and the cathedral. Posthusstræti 11, +354 551 1440.
Hilton Nordica This may be the best bet for peace and quiet, especially on weekends, away from the city centre. Sudurlandsbraut 2, +354 444 5000.
EAT & DRINK Bæjarins Beztu Pylsur Icelanders will eat anything, including ram testicles and pickled seal flippers. Thanks to American soldiers once stationed nearby, they've also acquired a taste for Yankee fast foods. This hot-dog stand, in business since 1937, continues to edge out pizza and burgers with its lamb variation on the classic tube steak. For the works, just say, "eina med öllu". Bollagardar 11, 170 Seltjarnarnes, +354 894 4515.
Dill Restaurant At Gunnar Karl Gíslason's edible think tank, he produces astonishingly inventive New Nordic dishes with ingredients sourced from the island's cleverest foragers. His seared breast of wild goose is dusted with hay ash and an emulsion of ripe summer blueberries; ruby cubes of salted salmon melt in the mouth; a smooth celeriac mousse gets its tartness from tiny green strawberries pickled in Danish apple vinegar. A sweet rhubarb soup is infused with birch bark and leaves. Sommelier Ólafur Örn Ólafsson is another mad scientist, and with very little urging he will produce his private reserve of schnapps steeped with wild herbs or a microbrew ale distilled with water from an iceberg. Norræna húsinu, Sturlugötu 5, +354 552 1522.
Frú Lauga Command central for picnic supplies when all you crave is a chunk of local sheep's milk cheese, slices of smoked lamb, rhubarb preserves and traditional flatbread. This grocery and gift shop also carries knitted wool products, cookbooks, seasonal wild berries and salty harðfiskur (air-dried haddock) that true Vikings love to smear with creamy butter and gnaw like jerky. Laugalæk 6, +354 693 9165.
Höfnin Restaurant This dockside bistro serves Icelandic comfort food in a converted warehouse next to the old harbour from which whale-watching tours depart. Thankfully, putrefied shark never appears on the menu, but try the Arctic char soufflé with fennel, horseradish, cauliflower and apple salad. The grilled salmon is paired with pickled cucumbers, and the traditional plokkfiskur fish stew has dainty white potatoes bobbing in cream stock. Geirsgötu 7c, +354 511 2300.
Icelandic Fish & Chips Fish and chips: two of the major food groups (along with beer) in the Icelandic dietary pyramid. So what's not to love about an organic chip shop where the freshly caught haddock and wolf fish are served in flaky spelt-barley batter and the hand-cut spuds roasted in olive oil with garlic or rosemary? Best dipped in tartar skyronnaise, made with tangy yoghurt-style skyr. Tryggvagötu 8, +354 511 1118.
Kaffismi Dja Íslands Reykjavík, like Seattle and Amsterdam, is fuelled by java. The accomplished baristas here are experts on the global bean and mostly buy directly from small growers in Indonesia, Columbia and Brazil. Between the hot-pink roaster and their La Marzocco espresso machine, patrons squeeze around seven tables to sip lattes along with freshly baked scones and hand-dipped chocolates. Kárastígur 1, +354 517 5535.
Nauthóll Eythor Rúnarsson's modern bistro caters to a hungry lunch crowd that flocks to his sunny patio and white-on-white dining room overlooking a public beach. Staffers weave between tables bearing generous portions of fried plaice with rémoulade and a succulent fish soup. Don't miss Iceland's addictive national snack: scorched flatbread with slices of smoked lamb and sweet butter. Nauthólsvegur 106, +354 599 6660.
Prikid Not really a café or bar or dance hall, but some amalgam of all three, where regulars linger on stools from first caffeine jolt to last call for alcohol. Feeling a little worse for wear? Try the hangover killer: a ham-cheese-bacon-egg sandwich drowned in garlic dressing with a Jack Daniels milkshake and Treo painkiller tablet on the side. Bankastræti 12, +354 551 2866.
Vid Tjörnina This inviting seafood restaurant, in a townhouse snugly decorated with floral wallpapers, framed needlepoint and antique oak furniture, specialises in husmanskost, or home cooking, for which Icelanders are incredibly nostalgic - think farmhouse fish soup, baked salt cod and pork belly on mashed potatoes and cod chins with tarragon sauce. Templarasund 3, +354 551 8666.
Vínbarinn Considering that the Vikings raided Ireland for girlfriends on their way to Iceland, you would think the Celtic gift of gab might have surfaced here. Let's just say it requires a little lubrication to get the average Icelander in a chatty mood. Then, bless their hearts, it's practically impossible to shut them up or halt the singing. This cheerful wine bar next to Parliament attracts thirsty politicians, so that guy in the corner doing his Elvis impression might just be a cabinet minister. Kirkjutorg 4, +354 552 4120.
VOX restaurant Just off the Hilton Nordica's main lobby is the city's other minimalist shrine to Nordic cooking, although the occasional dabs of sugar-kelp foam on the granite chargers are a bit, shall we say, molecular? Reykjavíkers love the lavish Sunday brunch, when the buffet is heaped with more traditional smoked meats, artisanal cheeses, cured salmon and pickled herring. Sudurlandsbraut 2, +354 444 5050.
SEE & DO 66° North These Arctic specialists know a thing or two about cold - they make survival gear for Iceland's commercial fishermen and volunteer rescue squad. Their rugged waterproof sportswear is equally suited for hiking the high street or the glacial hinterlands. Midhrauni 11, Gardabae, +354 535 6600.
Blue Lagoon The water in this geothermal spa complex is tinted a curious milk-blue hue by silica mud, which bathers love to smear on their faces and torsos while soaking in the shallow bays surrounded by lava fields. Grindavík 240, +354 420 8800.
Bókin Antikvariát Browsing for hours on end between chaotic stacks of printed matter in a dozen languages is one of the greatest pastimes here on an island with the highest literacy rate in Europe and a heritage of epic storytelling. Hunt here for rare early editions of WH Auden's Letters from Iceland and Jules Verne's Journey to the Center of the Earth. Klapparstíg 25-27, +354 552 1710.
Eggert feldskeri Walk into furrier Eggert Jóhannsson's showroom and you may wind up lingering at the Arctic Circle until winter, when his extravagant Icelandic lamb and mink coats will keep the chill at bay. Skólavördustígur 38, +354 551 1121.
Elm Elfin queens with a penchant for fetish favour the beribboned, draped chiffon, jersey-knit and linen dresses designed by a trio of feminist artists. Laugavegur 1, +354 511 0991.
Harpa Big news on the Reykjavík arts front is this new home for Iceland's national opera and symphony orchestra. The concert hall's façade resembles a cubic glass beehive that bounces light off the harbour. Rounding out the experience are a music shop and Nordic tapas café and restaurant. Austurbakki 2, +354 528 5050.
Jet Korine This waif-like newcomer imprints volcanic ash and rust on ethereal tops and shawls, stitched one at a time in a studio that doubles as her shop. Her romantic woollen Life Coat is straight out of Middle-earth. Skolavördurstígur 17a.
Spúútnik The best vintage in a town that loves magpie chic. The racks are always filled with a select range of fur hats, messenger bags, cotton dresses, leather bomber jackets, denim and hand-knit sweaters. Next door, sister store Nostalgía is certainly worth a look. Laugavegur 28b, +354 533 3080
Steinunn Steinunn designed for Gucci and Calvin Klein before launching her own inspired label. Her moody, sculptural wool knits and silk separates have even been the focus of an exhibition at the Reykjavík Art Museum. Grandagardur 17, +354 588 6649.
Thelma Design Thelma Björk Jónsdóttir fashions adorable made-to-measure headpieces with bits of lace, satin, beads and embroidery. Her frilled caps have also cropped up in Paris and Tokyo. Reykjavík stockists include Epal, Skeitan 6, +354 568 7733.
Smekklyska What to expect from a music store whose name translates as "bad taste"? For starters, Björk's entire back catalogue as well as every ambient chirp by Sigur Rós and sister band Amiina. Mugison and Sin Fang Bous are also top of the charts, along with Icelandic choral groups, electronica, and emerging garage bands that busk outside on weekends. Laugavegur 59, +354 551-3730.