By using a test-trace-isolate strategy of containing infectious diseases early in the pandemic, Iceland was viewed as a model for quickly addressing and managing the spread of COVID-19. In September and October of 2020, however, the number of daily COVID-19 cases rose, peaking higher than in the first wave of the pandemic. The number of daily COVID-19 cases has been dropping back down in November and early December of 2020. According to the World Health Organization, as of December 8, 2020, there have been 5,496 confirmed COVID-19 cases with 27 deaths in Iceland.

Iceland is a small nation and, as an island, its borders are well controlled. Frequent testing, including testing for all who enter the country, in combination with contact tracing, isolation, and quarantine measures, has helped ensure that hospitals are not overwhelmed by patients. Doctors have reported that, while hospitalizations are greater in the second wave of the pandemic, intensive care admissions for COVID-19 are lower. The lower need for intensive care may be because younger, otherwise healthy people are being infected at higher rates than older individuals.

In addition to earlier monitoring and supportive treatments, the lower number of deaths may also be related to the fact that most residents of Iceland (95.3%) have access to Universal Health Coverage and the incidence of pre-existing conditions (like obesity and diabetes) is lower than in many countries, including in U.S.

Early in the pandemic, media reports suggested that Iceland successfully “beat” coronavirus or “eliminated” the case curve that many countries have been taking measures to flatten. Unlike many countries, early planning and preparedness was instituted to ensure that the country was able to track and trace anyone possibly exposed to an infected person. Iceland began preparing for COVID-19 before any cases had been reported in the country. By employing law enforcement officers, nurses, and a criminologist, the team was able to use their skills as detectives to track both people and the virus once the first case was identified. As cases increased, the tracing team also increased and included epidemiologists, physicians, and other health professionals. At one time, the country expanded testing to the highest per-capita rate in the world.

With an increase in COVID-19 cases during September and October of 2020, policies were adapted to limit gatherings to no more than 10 people, close businesses where social distancing cannot be maintained (like bars, clubs, pools, and gyms), and require masks in areas where safe distancing cannot be maintained until at least December 9, 2020. With the decrease in COVID-19 cases during November and early December of 2020, some restrictions on retail shops, restaurants, performing arts and sports are scheduled to be eased starting from December 10, 2020. The gathering limit of 10 people, however, has been extended until January 12, 2020.

Additionally, Iceland's borders have only been open to those within the Schengen Area (including the European Union, European Free Trade Association, European Economic Area) for most of the pandemic, with limited visas being issued in December 2020 and January 2021. Those arriving to Iceland have the option to be tested for COVID-19 twice upon entry along with a quarantine of 5-6 days, or to undergo a 14-day quarantine. Testing is offered free of charge to people arriving in Iceland until at least January 31, 2020. Starting on December 10, visitors who can provide proof of prior COVID-19 infection will be exempt from testing and quarantine requirements.