The Icelandic sheep are of medium size with mature ewes weighing 150-160 lbs. and rams 200-220 lbs. They are fine boned with open face and legs and udders. The breed has both polled and horned individual of both sexes but it is primarily horned. Icelandic sheep are not particularly tall but broad and have an excellent conformation as a meat breed. They are early maturing and the ewes can easily lamb at 12 months of age. Ram lambs can start breeding around seven months old. Life expectancy is long, healthy ewes commonly lambing until they are 12 to 14 years old in Iceland.

The modern Icelandic Sheep is a direct descendant of the sheep brought to Iceland by the early Viking settlers in the ninth and tenth century. They are of the North European Short Tailed type, related to such breeds as the Finnsheep, Romanov, and Shetland. A major gene controlling prolificacy has been identified in the Icelandic breed. This gene exhibits action similar to the gene found in the Booroola Merino.
The fleece from Icelandic sheep has an inner and outer coat typical of the more primitive breeds, and it is the wool for which Iceland is known. It is illegal to import any sheep into Iceland.