The historical village of Djúpavík dates back to 1917, when a herring factory was established in this small creek by the fjord Reykjarfjörður. The first attempt was short lived but in 1934 a new factory was erected, the largest concrete house in Iceland at the time. The factory operated until 1954, but today it serves as an exhibition building. The houses in Djúpavík are only used as summer dwellings today, except for the hotel, Hótel Djúpavík, which is open all year.
Djúpavík is a part of Árneshreppur the least populous municipality in Iceland, with only 53 inhabitants. It stretches over a wide area, though, covering some 780 km2. The population density is thus only 0, 07 individuals per km2. The area does not enjoy any public transport, apart from one to two weekly flights from Reykjavik to Gjögur, a small settlement which is only inhabited during the summertime. Most visitors travel by car.