Tourism is one of Iceland’s fastest growing sectors. Millions of international tourists have visited the country in recent years, many of them drawn by its unique but highly sensitive natural environment. After an overview of the key trends and features of tourism in Iceland, this chapter describes the environmental impact of tourism, including on landscape, flora and fauna. It reviews the institutions and the policy responses put in place to ensure that tourism promotion adequately takes account of environmental concerns. These include financing environment-related infrastructure, promoting green innovation and strengthening the quality of tourism operators.