Since Iceland was first settled at a time when the Norse were already beginning to convert to Christianity, Iceland was a partially Christian society from the beginning. This was especially the case since many of the early settlers came from Viking colonies in Celtic lands, where most Norse men and women were at least nominally Christians. There would have also been Christians of Celtic stock among the members of their households.
The source for the traditional narrative of the official Christianization of Iceland is Ari Thorgilsson’s Íslendingabók (“Book of the Icelanders”), which was written around 1125.The story goes like this:
The formal conversion of Iceland began when King Olaf Tryggvason sent Thangbrand, a German priest, to the island. During the year or so he was in Iceland, he managed to convert some influential people. But Thangbrand killed a few people who had insulted him, and had to flee back to Norway to save his life. When Thangbrand told Olaf what had happened, and gave the opinion that converting Iceland would be quite a difficult task, Olaf flew into a rage and threatened violence against some Icelanders who were living in Norway.
A pair of Christian Icelanders, Gizurr the White and Hjalti Skeggjason, traveled to Norway and talked him out of his plan for vengeance. In return, they agreed to attempt to convert the entire island to the new faith. The pair went to the next meeting of the Althing (the Icelandic governing assembly) and presented the matter to the people. This was in the year 999 or 1000. The island was deeply divided by the matter, and the situation was growing tense. Thorgeirr Thorkelsson, the lawspeaker (the head of the assembly) and a pagan, was called upon to arbitrate the dispute. He left the Althing for a day and a night, during which time he lay under his cloak, possibly undertaking a traditional pagan ritual to obtain visionary insight.
When Thorgeirr emerged in the morning, he proclaimed that if Iceland were to remain one country, it had to unite under one religion, and that religion had to be Christianity. Everyone therefore had to be baptized. However, those who wished to continue being pagans could do so privately.
We have little basis for determining the historical accuracy of this story. Some of its broadest outlines may be verifiable, in that formal Christianity surely did largely come to Iceland from Norway, and certainly seems to have been overseen by Hamburg-Bremen in Germany, since clergy from that archbishopric were active in both Norway and Iceland in the tenth and eleventh centuries. However, to quote Fletcher once more, the plot itself is probably “too good to be true.” The reality stands to have been more gradual and less dramatic than that.