Cafe Loki

Directly across the street from Hallgrimskirkja, Reykjavik's iconic church, sits a small cafe that has become one of the most visited restaurants in the city. Cafe Loki does not serve tasting menus or craft cocktails. It serves traditional Icelandic home cooking — the kind of food that Icelanders grew up eating — and it does so with warmth, consistency, and prices that feel like a gift in one of the world's most expensive cities.

What to Eat

The menu at Cafe Loki reads like a primer on traditional Icelandic food. Start with the Icelandic Plate Loki — a generous board of rye bread topped with mashed fish (plokkfiskur), smoked lamb, and pickled herring. It is the single best introduction to Icelandic flavours you will find anywhere in the city.

The lamb soup deserves special mention. Made from slow-cooked Icelandic lamb with root vegetables, herbs, and a generous amount of tender meat, it is deeply warming and exactly the thing you want after a morning walking around Reykjavik in the wind.

For dessert, the rye bread ice cream is the dish that made Cafe Loki famous on social media and travel blogs. Homemade ice cream infused with dark Icelandic rye bread, it has a unique malty sweetness that sounds unusual and tastes completely right. It is the most-photographed item on the menu, and deservedly so.

The Setting

Cafe Loki is small, colourful, and perpetually busy. The decor is cheerfully Icelandic — think wooden tables, hand-knitted details, and windows overlooking the church across the street. The atmosphere is relaxed and unpretentious. You will sit alongside tourists, locals on their lunch break, and families with children, all eating the same honest food from the same compact menu.

Why It Works

In a food scene that increasingly leans toward international influences and fine dining innovation, Cafe Loki is a deliberate counterpoint. It champions the old recipes — rye bread baked in geothermal ovens, dried fish with butter, lamb prepared the way it has been for generations. The fact that these dishes are genuinely delicious, rather than merely novelties, is why the queue outside the door never seems to shrink.

Practical Tips

No reservations are taken — just arrive and queue if needed. Turnover is fast, so even a visible line moves quickly. The kitchen closes at 21:30, and the cafe stays open until 22:00. Prices are remarkably fair: expect to spend ISK 2,000-3,500 for a filling meal.

Visit after exploring Hallgrimskirkja. You will be hungry, it is right there, and you will leave with a deeper appreciation for what Icelandic food was before the New Nordic wave arrived.