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Learn about the Blue Lagoon’s history

Born from the accidental runoff of a nearby geothermal power plant, Iceland’s Blue Lagoon is one of the world’s most iconic wellness sanctuaries. Its lava-field setting feels almost moonlike, yet its mineral-rich waters sparked a skincare revolution long before it became a global hotspot. Dive into the surprising history behind this modern Icelandic legend.

Timeline of events

1971–1973: Geothermal aquifers discovered at Svartsengi, Reykjanes Peninsula.

1976: Svartsengi geothermal power plant begins operation and its mineral-rich runoff forms the first pools.

1981: Locals begin bathing in the milky-blue reservoir which led to the first notable case of psoriasis improvement.

1987: Changing facilities are built and regulated bathing begins at the lagoon.

1992: The Blue Lagoon company is founded to study the water’s silica, algae, and minerals. 1994: A psoriasis clinic opens, capitalizing on the healing reputation of the waters.

1995: Launch of the Blue Lagoon skincare line, featuring products based on lagoon minerals.

1999: Lagoon is moved to its present site.

2005: Opening of Blue Lagoon Clinic Hotel (later renamed Silica Hotel).

2007: Expansion of facilities; opening of Lava Restaurant.

2018: The Retreat, a luxury spa resort with subterranean spa and terraced lagoon, opens.
2024 (Nov–Dec): Lava from the Sundhnúkur eruption reaches the Blue Lagoon’s parking lot, damaging infrastructure.

2025 (Apr): Another volcanic eruption forces evacuation and temporary closure of the Blue Lagoon.

Blue Lagoon’s history explained 

1. Origins in the Lava Fields (1970s–1980s)

When the Svartsengi geothermal plant began operating in 1976, its runoff created a warm lagoon rich in silica, blue-green algae, and mineral salts. Locals first tested the waters in the early 1980s, noticing relief from skin conditions. Icelandic dermatologists and researchers at the newly formed Blue Lagoon company later studied these elements, confirming their therapeutic properties and turning an industrial accident into a nationally celebrated wellness discovery.

2. From healing waters to iconic spa (1990s–2000s)

The 1990s marked a defining era: scientists analyzed the lagoon’s silica, algae, and mineral blend to understand its therapeutic effects, leading to clinical treatments for psoriasis and the opening of the Blue Lagoon Clinic in 1994. By 1995, its signature skincare line debuted. In 1999, the lagoon was relocated to a purpose-designed basin with modern facilities, establishing the blueprint for the world-famous spa experience that followed.

3. A global wellness landmark (2010s–Present)

Recent decades saw major upgrades: Lava Restaurant opened in 2007, followed by expanded bathing areas and improved wellness facilities. In 2018, the Retreat Hotel and its subterranean spa introduced a luxury dimension that drew global acclaim. Even amid Reykjanes Peninsula volcanic unrest, Icelandic authorities maintain 24/7 geological monitoring and temporary closures when needed, ensuring safe, carefully regulated access to the country’s most iconic geothermal sanctuary.

Construction of Iceland’s Blue Lagoon

Constructed quite unlike a traditional spa, the Blue Lagoon’s purpose-built design began in the mid-1990s, when engineers realized the original pond couldn’t naturally retain water because the porous lava field caused constant seepage. To create a stable, permanent lagoon, specialists lined the basin with hardened silica deposits formed naturally by the geothermal effluent, turning them into a functional sealing layer instead of using artificial materials.

Architect Sigríður Sigþórsdóttir designed the 1999 lagoon and its facilities to blend into the landscape without altering the lava formations. Instead of reshaping the terrain, crews built around the jagged lava walls, anchoring pathways and structures directly into existing fissures.

Unique circulation systems were engineered to refresh the entire lagoon every 40 hours, using geothermal output rather than pumps or chemicals.

Over time, these construction choices created a site that feels carved by nature, even though its layout, water retention, and infrastructure required highly specialized engineering beneath the surface.

Blue Lagoon today: Why it matters

Today, the Blue Lagoon is a sustainability icon, operated by the Blue Lagoon company, which is B Corp certified for its high standards of social and environmental performance.

It’s also internationally recognized: in 2021, it was named Environmental Company of the Year in Iceland. The lagoon runs on 100% geothermal energy from the Svartsengi Resource Park and recycles CO₂ in its R&D operations. They even use the captured CO₂ to grow algae for its skincare products.

Frequently asked questions on Blue Lagoon’s history

The lagoon formed in 1976 when mineral-rich water from the Svartsengi geothermal power plant pooled in the surrounding lava fields, creating the first milky-blue reservoir.