With a literacy rate of 100%, Icelanders allegedly read the most books per capita in the world and also produce a lot of literature themselves.

When researching Icelandic literature, one has to go back to the beginnings and take a look into Medieval Icelandic literature.

Medieval literature is still quite popular in Iceland and is usually divided into three parts: Eddic poetry, Sagas and Skaldic poetry.

Eddic Poetry

The Eddas are the most expansive source on Norse mythology and Germanic heroic legends.

The Elder Edda is a collection of Old Norse poems and stories originated in the late 10th century.
She is also known as Sæmundar Edda or Poetic Edda, and is nurtured from the Icelandic medieval manuscript Codex Regius ("Royal Book").The first part of the Codex Regius preserves poems that tell the creation and foretold destruction and rebirth of the Old Norse mythological world as well as individual myths about certain Norse deities.

For instance, Völuspá, which translates into “Prophecy of the Völva” (Seeress) is the first and best known poem of the Poetic Edda. It tells the story of the creation of the world and its impending end including the famous ragnarök (“The fate of the Gods”) foretold by a völva addressing Allfather Oðinn. It is one of the most important primary sources for the study of Norse mythology.

The poems in the second part narrate legends about Norse heroes and heroines, such as the famous Sigurd, Brynhildur and Gunnar as well as of the Nibelungs.

The Poetic Edda has also become an inspiring model for many later innovations in poetic meter, especially in the Nordic languages, offering many varied examples of terse, stress-based metrical schemes working without any final rhyme, and instead using alliterative devices and strongly concentrated imagery.

The Younger Edda or Prose Edda was written or at least compiled by a medieval scholar and historian named Snorri Sturluson around the year 1220 and is therefore sometimes referred to as Snorra Edda.
It’s a great source of modern understanding of Norse mythology and also of some features of medieval Icelandic poetics, as it contains many mythological stories and also several kennings, a type of metaphorical compound word or phrase used as an allusion to a simpler idea which (at the time) would be immediately recognised by the audience.

The Younger Edda’s main purpose is often described as being used as a manual of poetics for the Icelandic skalds. The work consists of a Prologue and three separate books: Gylfaginning, concerning the creation and foretold destruction and rebirth of the Norse mythical world; Skáldskaparmál, a dialogue between Ægir, a Norse god connected with the sea, and Bragi, the skaldic god of poetry; and Háttatal, a demonstration of verse forms used in Norse mythology.

For some more insight, if one looks closer into Gylfaginning, or the Tricking of Gylfi, one would find that the book contains of about 20,000 words and tells the story of Gylfi, a Scandinavian king of who is being tricked by one of the goddesses of the Æsir and therefore asks himself if all Gods use magic and tricks in order to get their will. This is why he travels to Asgard, the home of the Gods, but on the way he is tricked by the gods again and ends up in some other place, where he finds a great hall. Inside the palace hall he encounters a man who asks Gylfi's name and so king Gylfi assumes the identity of Gangleri. Gangleri then is taken to the king of the palace and comes upon three men: Hár (“High”), Jafnhár (“Just-As-High”), and Þriðji (“Third”).

Gangleri is then challenged to proof his wits by asking questions, as is the custom in many Norse sagas. Each question to High, Just-As-High, and Third is regarding Norse mythology or its gods, and also about the creation and destruction of the world. In the end all the great hall and its people just vanish and Gylfi is left standing on empty ground. It is then implied that Gylfi returns to his nation and retells the tales he was told.

Skaldic Poetry

Skaldic poetry mainly differs from Eddic poetry by the fact that skaldic poetry was composed by well-known skalds, the Icelandic poets. Instead of talking about mythological events or telling mythological stories, skaldic poetry was usually sung to honour nobles and kings, commemorate or satirise important or any current events such as a won battle, a political event in town. In narratives, poems were usually used to pause the story and more closely examine an experience occurring. Poetry was also used to dramatise the emotions in a saga.

For example, Egil's Saga most likely written by the infamous skald and viking Egill Skallagrímsson, contains a poem called “Sonatorrek” (“Loss of Sons”) where the author mourns the death of his sons in a very lyrical and emotional way.

No wonder that skaldic poets were highly regarded members of Icelandic society.

Sagas

The Sagas of the Icelanders are acknowledged as one of Iceland´s most important contributions to world literature; but they are only one branch of the saga tradition. Their authors are almost always unknown. Norse sagas are generally classified as: the Kings' sagas (Konungasögur), sagas of the Icelanders (Íslendingasögur), Short tales of Icelanders (Íslendingaþættir), Contemporary sagas (Samtíðarsögur or Samtímasögur), Legendary sagas (Fornaldarsögur), Chivalric sagas (Riddarasögur) and Saga of the Greenlanders (Grænlendingasögur), Saints' sagas (Heilagra manna sögur) and bishops' sagas (Biskupa sögur).

The Íslendingasögur (“Sagas of the Icelanders”) or family sagas are probably the most important and most known category of sagas written in Old Norse, mostly in the 13th and 14th century. The stories, however, take place in the period from the settlement of Iceland around the end of the 10th century until the 11th century, that is why this era is also called the Saga Age.

These family sagas recount, in a uniquely objective yet arresting style, stories of conflict between individuals and clans, culminating in bloodshed. They provide an unparalleled and immensely important insight into the medieval mind, and ideas of honour, revenge and justice and they are not structured like chronicles or local legends; instead they are stylistically more alike to modern novels and their stories are told with great artistry.

The family sagas tell of genealogical and actual events of the time, such as the actual settlement of Iceland and the division of the land between families, the voyages of Vikings to unexplored lands or the early history of the inhabitants of Gotland. They describe the establishment of law and the structuring of society, and conflicts based on personal interests or honour.

While the Eddas contain mostly mythological stories, sagas are usually realistic and deal with real events, although there are also some legendary sagas, sagas of saints, bishops etc. Only sometimes the accounts are slightly altered and infused with mythological references or a story is made more romantic and fantastic as it really happened. Sagas are the main source to study the History of Scandinavia between the 9th and 13th centuries.

One of the most popular and thrilling of the Íslendingasögur is the Saga of Njáll (Njáls saga or Brennu-Njáls saga) which evolves around two friends and their families spanning over 50 years. The protagonists are Njáll Þorgeirsson, a lawyer known for his wisdom, and Gunnar Hámundarson, a formidable warrior. In the course of a feud, Gunnar is exiled and must leave Iceland but as he rides away from his home he is struck by the beauty of the land and therefore decides to stay which quickly leads to his death. Some years later, Njáll is burned alive in his home as a part of a cycle of killing and vengeance.

The saga deals with the endless business of blood feuds in the Icelandic Commonwealth, showing how the requirements of honour can lead into destructive and prolonged bloodshed. Insults where a character's manhood is called into question are especially popular. For example, Njáll's lack of a beard is repeatedly referred to and used by his opponents to call his virility into question, or on a different occasion the gift of a silk garment is considered an insult by one party and a hard-won settlement breaks down as a consequence.

Although having been written hundreds of years ago, the medieval literature remains popular and often read and referred to in Iceland.