The origins of the Icelandic Police originate around 1778, when the first traces of industry started to appear. Before that, law had been enforced by individuals as appointed by the Alþingi, the Icelandic Parliament, and later by so called sýslumenn (“sheriffs”) or by other proxies of the Danish King.

During the famine years of 1751-58 theft and looting increased all around Iceland. The culprits were sentenced to forced labour in Copenhagen as Iceland was under Danish rule by that time and had no own prisons or penal camps.

Until the convicts could be shipped out to Denmark, the Icelandic sheriffs had to keep them in local detention which was very costly.

In 1757, a petition was sent to the Danish King asking for permission to simply hang the convicts instead of sending them abroad because it would save lots of money. The request was denied, instead it was decided to let convicts work on the spot by letting them build an adequate prison in Reykjavík instead of suffering other punishment.

Work on the new penitentiary began in early 1761. The Cabinet House, as the institution was referred to, (Stjórnarráðshús) was opened in 1764 and was Iceland's very first prison; today it is home to the Prime Minister’s offices.

In the same year there was also a fire in a workshop of a manufacturing plant Innréttingar. This company was Reykjavík's first industrial enterprise and by the standards of the time a rather large venture. The implementing of Innréttingar marks the starting point of Industrialization and significant urban development in Iceland. The undertaking was headed by Skúli Magnússon, the Governor of Iceland, and was part of a programme of social improvement planned by Icelandic officials and the Danish authorities and was therefore awarded with substantial financial support from the Danish government.

The opening of the prison resulted in inmates occasionally escaping and breaking into houses. These circumstances as well as another fire at one of Innréttingar's manufactories made the company appoint a night-watch around 1778.

The watchmen can be seen as the forerunners of modern police in Iceland, since in addition to patrolling the properties of their employers' and raising the alarm in the event of a fire, they were also supposed to be on the lookout for any criminal activities in the streets of Reykjavík.

The guards were equipped with a lantern, an hour-glass and spiked clubs known as “morning stars” which shows that they were expected to confront possible adversaries with force.

They also sang verses to mark the hours, as it was a custom elsewhere in Europe, both to confirm that everything was in order and to mark the passage of time.
One o’clock
Lay thy yoke, dear Jesus,
on us to bear with patience
though the way be hard;
Thou art our Saviour.
It is now one o’clock.
Thy merciful hand
expunge our sins;
our burden will then be light.

Two o’clock
Loving infant Christ!
We sing your praises high,
Thou wished’st to be born,
Light of the World, in night’s darkness.
Divinity’s great spirit,
lighten our way, we look to Thee
and praise Thee for eternity!

Three o’clock
Now dark night pales,
clear day approaches.
Even so, God, let those depart
from us who plan evil deeds.
Our clock calls three;
give help and strength,
give us now Thy mercy,
our kindly Father.

Four o’clock
The eternal host of heaven
sings Thy praise, O Lord.
Thou wast watchman
of us men on earth.
The watch ends at last.
Praise God in peace,
the night is past;
make use of the time we have.

Five o’clock
Jesus’ great morning star!
We commit to your might
our king.
God guide and protect him.
Now the clock strikes five,
come, cheerful sun,
from heaven‘s seat,
and light our dark homes.

Six o’clock
God apportioned us in Iceland
the shortest day;
we also have the longest night,
a boon for the tired.
Here, therefore,
the watch lasts longer
than abroad;
now the clock strikes six. Seven o’clock
Arise for work
in Jesus’ name!

Seven o’clock has come; take care!
Be quick;
When the Lord judges
all people
may He grant us the grace
to do right!

Eight o’clock
Dusk wraps the earth
ending day‘s delay.
This reminds us
of death and the grave.
Light us, Christ, the way!
At all times
and at the end
to give us peaceful death in Thee.

Nine o’clock
Darkness has come, dear Lord,
through Jesus’ bloody wounds,
we beg Thou willst wipe out
all our transgression and guilt.
Protect our king
and all people
throughout his land
from enemies’ cruelty.

Ten o’clock
People of high and low estate
if you wish to know
the time of night,
now is the hour of rest.
Commit yourselves to God;
be cautious;
ensure your fires are safe.
The watch now strikes ten.

Eleven o’clock
May the Eternal Father,
keep us, young and old.
May the blessed angel host
raise a fort around us!
He is our town‘s shield;
keep our houses,
Jesus, Son of God,
our property, spirit, soul and life.

Twelve o’clock
Remember the Saviour was born
of the Virgin at the midnight hour,
comfort for a wide world
otherwise fallen.
Twelve o’clock strikes;
from the heart’s depth,
commit yourselves, in word and deed,
to His power.

The night patrols were entirely paid for by Innréttingar and were in service up until June of 1791. That very year in September, an infamous criminal escaped from prison and Reykjavíkians called for some kind of law enforcement. Thereupon a group of influential citizens started employing paid patrols. The Icelandic authorities reacted and hired a watchman, the first municipal employee, on 10th November 1791.

At the end of 1802, the Dane Ludvig Erichsen became regional Governor and he reported to the Royal authorities that there was virtually no law enforcement in Reykjavík; there was no fire brigade and the town watchman was drunk and disorderly. Furthermore, crime was hardly ever reported or punished, and people settled their differences themselves.

As a result of that negative report, a bailiff was appointed in 1803 and two former soldiers from Denmark, Ole Björn and Vilhelm Nolte, became the first two official policemen in Iceland. Ole Björn was also running a “club” where people drank and gambled.Vilhelm Nolte's main profession was shoe making which was one of reasons why he was hired since there was only one shoe maker in all of Reykjavík by the time and Nolte was supposed to work as shoemaker in addition to being a guardian of the law. He was dismissed after one year of duty because he started drinking heavily. Apparently he went off on an excessive binge right after being hired and totally neglecting his duties.

In 1814 Jón Benjamínsson became the first Icelandic policeman. Only little is known about him except that he had been a shop worker, in Hofsós and later in Reykjavík. He is believed to have left Iceland after his time at the law enforcement. His successor Lars Möller was also dismissed for drunkenness and Þorsteinn Bjarnason was deputized instead. He served as a policeman in Reykjavík from 1836 until his death in 1865. Before that, he had been a farmer, local parish director and carpenter. The last police officer of Danish nationality in the capital was dismissed in 1859, after which the force was staffed entirely by Icelanders.

New regulations covering many aspects of police work, including investigation of crimes and supervision of criminals was implemented in the following decades and the Parliament passed a Police By-Laws Act, effective from 1891, after which police officers were gradually introduced in the population centres outside Reykjavík and which led to a growth of the police forces all over the country.

For example in Akureyri, the so called “Capital of the North” (of Iceland), a police officer was introduced quite early in about 1820. This one Danish officer of law enforcement was solely responsible for the town's 50 inhabitants and his salary was paid by the town's traders. His duties included arresting drunks and preventing duck shooting on the fjord at weekends. After the traders failed to pay for the police man's wages, the position was dismissed for a few years.

In 1918 the police force in Reykjavík had increased to nine officers, by 1937 the number rose up to 60. The first police station in the capital was located at Vesturgata 4 and it was open 24hours a day for the first time in 1923 hanks to an initiative by then-mayor, Knud Zimsen. Police reports from the early 20th century read quite amusing today: In 1915 in the Westman Islands, an archipelago off the coast of South Iceland, the law stated that troublemakers and drunkards were to be detained in jail until they sobered up. Given that there was no prison on the islands, the delinquents were simply locked into their own bedrooms.

Also the police in the capital faced certain technical challenges, especially when it came to transporting people they had arrested. A hand-wagon was used to transport detainees, mostly drunks or others who couldn't walk, but the box was too small for most average-sized people and the policemen often resorted to carrying the same on their shoulders.

In 1933, the Alþingi passed the Police Act which provided state participation in financing of police forces, in 1972 the state took over command of law enforcement in Iceland, creating the National Police and in 1977 State Criminal Investigation Police started operations under a special Director.