If one place can claim the title of being in the middle or center of the Icelandic Highlands, it is Nýidalur or New Valley. You must visit this place if you choose to drive your rental car or your 4x4 [A1] through the Icelandic Highlands Road Sprengisandur between the southern and the northern regions. You should seriously consider stopping for a night or two in the mountain cabins or camping area there, although you should probably keep in mind that the altitude is 1.100 meters, and it is rarely warm in the middle of the Highlands.
How New Valley gained its name
For centuries, there was a suspicion among farmers in the northern region of Iceland, around the valley Bárðardalur and in Eyjafjörður, that deep in the Highland was an area with considerable vegetation. This was supposedly a place where sheep would wander, but it was too far and too deep for farmers to go and herd their sheep in the autumn. These beliefs would also entail stories about outlaws living in unusually pleasant conditions as if in an oasis. So in 1843 and 1844, three men traveled from Bárðadalur to explore this place. To their surprise, there actually was considerable vegetation in the middle of the enormous black desert of Sprengisandur. They then came to a valley they named New Valley, a moniker that has stuck with Nýidalur ever since.
A plethora of interesting hiking options
Nýidalur is conveniently located in the middle of the Sprengisandur Road, or Road F26. It is an ideal place to stop when driving this Highland Road. Not only can you take part in some exciting hiking tours, but you can also drive along the 4X4 track northeast of the tiny glacier Tungnafellsjokull and take the exotic hiking path to the geothermal area near Vonarskarð. After all, Nýidalur is not a place you want to drive through in a hurry, although everything seems cold and black.