Skjálfandi, geologically more a bay than a fjord, is located in the northern part of Iceland. The Icelandic word "Skjálfandi" literally translates as "trembling" which might refer to earthquakes in the area.
The bay, originally created by glacial activity, has two major streams flowing into it: Skjálfandafljót, which is a glacier river, and Laxá, which is a freshwater river. The river Laxá (English: "Salmon River") is famous for its salmon and part of the river is protected by the Ramsar Convention.
There are two islands in Skjálfansi. The biggest is Flatey which name means flat island and must be not confused with other islands of Iceland with the same name. It is situated close to the opposite side of the bay in respect to Húsavík and, because of its flat nature, it is observable only from a relief when not in the nearby. There is a village on the island, nowadays not any more inhabited, composed of few houses, a school and a church. There is no ferry serving Flatey, however some houses are used as summer houses. Skjálfandi's minor island is called Lundey. Its name means island of the puffins because of the great colony of puffins living on its cliffs during the summer. Lundey is located close to Húsavík.