Skjálfandi (also known as Skjálfandaflói) is a bay in northern Iceland, with some of the characteristics of a fjord. The Icelandic word Skjálfandi literally translates to trembling which may 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 Skjálfandi. The largest is Flatey (flat island). It is situated close to the opposite side of the bay from Húsavík. 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. 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.
Garðar Svavarsson was one of the first Scandinavians to settle in Iceland, doing so around 860 CE. He built a house in Skjálfandi, but spent only the following winter months there before leaving Iceland. His slave Náttfari was left behind and continued to live on the farm but was run away from it later by a Norse settler, forcing Náttfari til build a new farm on poorer land in Náttfaravík by Skjálfandi.