Iceland was settled in the late 800s, mostly by Scandinavian Vikings. The Skagafjörður region had many settlers, who divided the land according to commonly acknowledged rules. The land where Sauðárkrókur stands was first taken by the Viking Sæmundr Suðureyski ("Sæmundur from the south islands". South islands is the name Vikings gave the Hebrides islands of the coast of Scotland), but as he was marking his land another Viking, called Skefill, successfully "stole" the land where the oldest part of the town is today. These settlers did not built their homes at Sauðárkrókur, and the current site of the town was not settled until about 1000 years later.
Market and merchants
Docking ships in Skagafjörður was not an easy task for sailors and merchants. Few natural harbors are to be found, especially on the west coast of the fjord, and most merchants docked at the trading posts of Hofsós, Grafarós and Kolkuós on the east coast of the fjord. During the Danish monopoly (1602–1787) Hofsós was the only permitted trading post in Skagafjörður. At that time the river Héraðsvötn was a huge obstacle for those living on the west side of the fjord, and many people lost their lives crossing the river to reach the market. As the population on the west side of the valley grew, so did the need for an accessible market place; and several times privateers tried their luck by illegally trading from their ships by the shore of Sauðárkrókur. In 1856 Sauðárkrókur became a permitted trading post, and merchants were allowed to trade from their ships.
The first inhabitants
In 1871 the first real settlement at Sauðárkrókur took place. The blacksmith Árni Árnason, with his wife Sigríður Eggertsdóttir and
