Icelandic orthography uses a Latin-script alphabet which has 32 letters. Compared with the 26 letters of the English alphabet, the Icelandic alphabet lacks C, Q, W, and Z, but additionally has Ð, Þ, Æ, and Ö. Six letters have forms with acute accents to produce Á, É, Í, Ó, Ú and Ý.

The letters eth (⟨ð⟩, capital ⟨Ð⟩), transliterated as ⟨d⟩, and thorn (⟨þ⟩, capital ⟨Þ⟩), transliterated as ⟨th⟩, are widely used in the Icelandic language. Eth is also used in Faroese and Elfdalian, while thorn was used in many historical languages such as Old English. The letters ⟨æ⟩ (capital ⟨Æ⟩) and ⟨ö⟩ (capital ⟨Ö⟩) are considered completely separate letters in Icelandic and are collated as such, even though they originated as a ligature and a diacritical version respectively.

Icelandic words never start with ⟨ð⟩, which means its capital ⟨Ð⟩ occurs only when words are spelled in all capitals. The alphabet is as follows:

The above table has 33 letters, including the letter Z which is obsolete but may be found in older texts, e.g. verzlun became verslun.

The names of the letters are grammatically neuter (except the now obsolete ⟨z⟩ which is grammatically feminine).

The letters ⟨a⟩, ⟨á⟩, ⟨e⟩, ⟨é⟩, ⟨i⟩, ⟨í⟩, ⟨o⟩, ⟨ó⟩, ⟨u⟩, ⟨ú⟩, ⟨y⟩, ⟨ý⟩, ⟨æ⟩ and ⟨ö⟩ are considered vowels, and the remainder are consonants.

⟨c⟩ (sé, [sjɛː]), ⟨q⟩ (kú, [kʰuː]) and ⟨w⟩ (tvöfalt vaff, [ˈtʰvœːfal̥t ˌvafː]) are only used in Icelandic in words of foreign origin and some proper names that are also of foreign origin. Otherwise, ⟨c⟩, ⟨qu⟩, and ⟨w⟩ are replaced by ⟨k/s/ts⟩, ⟨hv⟩, and ⟨v⟩ respectively. (In fact, ⟨hv⟩ etymologically corresponds to Latin ⟨qu⟩ and English ⟨wh⟩ in words inherited from Proto-Indo-European: Icelandic hvað, Latin quod, English what.)

⟨z⟩ (seta, [ˈsɛːta]) was used until 1973, when it was abolished, as it was only an etymological detail. It originally represented an affricate [t͡s], which arose from the combinations ⟨t⟩+⟨s⟩, ⟨d⟩+⟨s⟩, ⟨ð⟩+⟨s⟩; however, in modern Icelandic, it came to be pronounced [s], and since it was a letter that was not commonly used, it was decided in 1973 to replace all instances of ⟨z⟩ with ⟨s⟩. However, one of the most important newspapers in Iceland, Morgunblaðið, still uses it sometimes (although very rarely), a hot-dog chain, Bæjarins Beztu Pylsur, and a secondary school, Verzlunarskóli Íslands have it in their names. It is also found in some proper names (e.g. Zakarías, Haralz, Zoëga), and loanwords such as pizza (also written pítsa). Older people who were educated before the abolition of the ⟨z⟩ sometimes also use it.