5. Mývatn

Lake Mývatn was shaped by repeated volcanic eruptions. All around the lake you can see sculptures in the lava, craters and cave formations. In and around the lake there is rich bird- and fishlife.
On the east part of the lake you find 'Dimmuborgir', a place with volcanic rock formations. The best known formation is "the Church", a cave open at both ends with a high dome-shaped roof. It is very nice walking (or running) around there.
A bit further, on your way to the East of the country you pass the Myvatn Nature Baths. They are a 'must' when you are travelling in this area. They are the 'Blue Lagoon' of the north, enjoyable to both adults and children with some hot springs all around you.
Still further east there is Námaskarð, Leirhnjúkur and Krafla. Námaskarð is a very colorful spot, with boiling mud-bogs and so called solfatoras. The mineral deposits create a variety of colors: blue for pyrite and yellow for sulfur. Please be careful there, especially with children, and follow the paths. The water is extremely hot (boiling).
Krafla, the geothermal powerplant, is close by.
Other places not to be missed include Hverfjall (mountain), Grjótagjá (small cave with thermal spring inside; before it was possible to bathe there but the water is too warm now (50°C)), Höfdi (a peninsula into the lake with panoramic view of the whole Lake Myvatn area) and Lofthellir (a cave).
Around 450 people live in the district of Skútustadahreppur with around 200 in the village of Reykjahlid.
More information can also be found here.