Hafnarfjörður is a town in Southwest Iceland with a population of 25,000. It has a long history as a town (by Icelandic standards) but has today become a suburb of Reykjavík and the westernmost town in the contiguous urban area of the capital.
Hafnarfjörður is in many ways dominated by its neighbour Reykjavík. However, it is also a separate town with its own centre and independent town spirit. It forms a sort of second centre of gravity in the greater Reykjavík area (or the greater Hafnarfjörður area as some locals call it), with most of the suburbs having formed between these two towns. The name of the town means harbour-fjord and Hafnarfjörður has a large harbour, used both for imports/exports and fishing. It also has some of the most important industrial areas around the capital.
The old town of Hafnarfjörður is what most people come to see. Despite its growth and becoming part of the much larger capital area, Hafnarfjörður retains a village charm in its heart, with small wooden buildings and narrow winding streets. You get the feeling of a place where everybody knows their neighbours.
One of the things that has helped Hafnarfjörður retain this status is how the town is planned and built around nature. It sits in the middle of a lava field, and in many places the lava formations have remained untouched, giving the town a very organic feel to it. This is what gives Hafnarfjörður the nickname "the town in the lava," and it is also partly because of this that the town has become increasingly associated with legends of the Icelandic elves in recent years.
Hafnarfjörður sits on the main road between Keflavík International Airport and Reykjavík, so you are likely to drive through it when arriving in Iceland and the FlyBus can stop there if requested. There are also scheduled buses between Keflavík and some of the other towns on the Reykjanes peninsula into Hafnarfjörður. From Reykjavík, it is easy to take the public bus that runs every 15-20 minutes. Route 1 starts from Lækjartorg in downtown Reykjavík and runs through Hafnarfjörður.
The centre of Hafnarfjörður isn't too big and it is easy to walk between the local attractions. Several bus routes can bring you to the other neighborhoods, the main interchange is called Fjörður.
Spend a day walking around in the old part of Hafnarfjörður. See the old houses and visit Hellisgerði, a popular public park where the natural lava formations of the area can be observed. In the park you can also find the only collection of Japanese bonsai trees in Iceland. As a part of your walking tour you can walk along the beach in the heart of the town. Five minutes away is a magnificent cliff from the top of which there is a view over the town. Hafnarfjörður has one of the only monasteries in Iceland and is home to a few museums.
In recent years, Hafnarfjörður has marketed itself well as the town of the Icelandic elves. This is understandable, given the local nature and the close proximity between human habitation and lava rocks. Several companies offer tours visiting the homes of the elves and listening to stories about them. The town is also becoming increasingly popular in December for its Christmas Village, open in the centre of town during weekends that month. People frequently come from Reykjavík and other towns in the Southwest to do some of their Christmas shopping.
There are several good options for outdoor activities around the edges of Hafnarfjörður. You can go hiking on the town mountain Helgafell or take a walk around the lake Hvaleyrarvatn. Íshestar  offer horse riding tours from their stables on the outskirts of town.
There are two annual festivals in Hafnarfjörður that can make for an interesting visit:
Hafnarfjörður has three swimming pools, two outdoors and one indoors:
Safety concerns in Hafnarfjörður are mostly the same as in other towns and cities, but it should be noted here that Hells Angels have recently set up base in Iceland - in Hafnarfjörður to be precise. Their headquarters are in an industrial area in the southwest of town, and although it's unlikely anything will happen to you if you're not involved in criminal activities yourself, it's a good idea to stay away.
Apart from simply getting on the next bus to Reykjavík, there are several options to get out from Hafnarfjörður. You could take the road south towards the lake Kleifarvatn and Krýsuvík, a geotehermal area on the south coast of Reykjanes which in fact belongs to the municipality of Hafnarfjörður. You could also drive west on Reykjanesbraut towards Keflavík (about 20 minutes away) and the other towns on the Reykjanes peninsula, or even go on a trip to the Blue Lagoon.