The submissions period was open until 10 October 2011. Both native Icelandic citizens and people legally residing in the country before 1 October 2010 can apply. Icelandic composers are allowed to collaborate with composers residing abroad and each composer may enter a maximum of three songs. All entries shall be performed entirely in Icelandic. On 12 October 2011, RÚV announced that, 150 entries had been submitted.
A total of 15 acts will compete in Söngvakeppni 2012. Each semifinal will feature five entries. Two of them will go through the final by to televoting. Therefore, the viewers will select six finalists. It is yet unknown if a jury will also select additional Icelandic qualifyers. This is an option being considered by RÚV at the moment.
The songs to make it to the televised phase of the Icelandic selection will be selected by an internal committee. The identity of the authors will remain secret to avoid biased decisions. The names of the participants in the selection will be announced at a press conference by RÚV.
During the Semi-Final Allocation draw which was held on 25 January 2012, it was announced Iceland were scheduled to compete in the first half of the first semi-final on 22 May. On 20 March 2012 the Running Order draw was held, which determined the order of which the participants performed. Iceland is set to perform 2nd in the first semi-final. After qualifying from the first semi-final, Iceland drew to perform 7th in the final. They came 20th with a total of 46 points.