In many OECD countries, tertiary education systems have experienced rapid growth over the last decade.With tertiary education increasingly seen as a fundamental pillar for economic growth, these systems must now address the pressures of a globalising economy and labour market. Within governance frameworks that encourage institutions, individually and collectively, to fulfil multiple missions, tertiary education systems must aim for the broad objectives of growth, full employment and social cohesion. In this context, the OECD launched a major review of tertiary education with the participation of 24 nations. The principal objective of the review is to assist countries in understanding how the organisation, management and delivery of tertiary education can help them achieve their economic and social goals. Iceland is one of 14 countries which opted to host a Country Review, in which a team of external reviewers carried out an in-depth analysis of tertiary education policies. This report includes: an overview of Iceland’s tertiary education system; an account of trends and developments in tertiary education in Iceland; an analysis of the strengths and challenges in tertiary education in Iceland; and recommendations for future policy development. This review of tertiary education in Iceland forms part of the OECD Thematic Review of Tertiary Education, a project conducted between 2004 and 2008.