The Icelandic breed belongs to the North European short-tailed race of sheep that has existed in Iceland since the Viking settlement some 1100 years ago. Because of Iceland's relative isolation, the breed has remained virtually unchanged since that time and so is the oldest pure breed in the world today. Icelandics are related to the Finnish Landrace, the Romanov of Russia, the Spaelsau in Norway, the Gotland in Sweden, and the Orkney and Shetland in the United Kingdom. There are now over 450,000 breeding sheep in Iceland which produce market lambs, the large part of which is exported. Wool, wool products, and pelts are also a very important part of the sheep industry in Iceland.
Icelandic sheep are one of the most commercially viable breeds in the world today.
The breed is well suited to the large farm as to the small because they are easy to handle and work. In Iceland they are summer range sheep grazing on vast mountainous commons without shepherding and are easily herded together in the fall and driven down into the valley's for winter breeding. Icelandic lambs born in May will breed the following December and lamb at one year of age. Twinning among those yearlings is common. Gestation length is shorter than modern breeds.