Icelandic is the official language of Iceland. In Iceland, people also speak German, English, Danish, Dutch, French and Basque. English and Danish are often mandatory for students in school. Danish is a minority language. Almost everyone in Iceland seems to be speaking very fluent English. They also tend to put some humor while speaking English.
Icelandic is a very difficult language to learn. The words are long and complicated. It is almost impossible for a foreigner to pronounce some Icelandic words. People who speak German or Nordic languages can recognize the similarity between their words and Icelandic words. English speakers may recognize some of the words since Icelandic language has also English roots. The great thing is that almost anywhere you go you can find English menus, signs and people who speak pretty good English. In Reykjavík, especially in restaurants and bars, you will find English speaking people everywhere. A lot of foreigners with different backgrounds work in Reykjavík. As a tourist you may expect to see Icelanders on streets of Reykjavík but its often filled tourists. You may feel lucky to hear Icelandic.
Since Iceland is a member of Nordic Concil, it uses Danish, Norwegian and Swedish as working languages. Icelandic alphabet is contains two old letters which no longer exist in the English alphabet: Þ, þ (þorn, modern English “thorn”) and Ð, ð (eð, anglicised as “eth” or “edh”), representing the voiceless and voiced “th” sounds, respectively. Icelandic became the official language in 2011.