Summer (June to August) is the obvious time. Daytime temperatures sit around 10–15°C, the sun barely sets — the Midnight Sun runs through June — and every road in the country is open. It is also the busiest and priciest time, and accommodation should be booked well in advance.
Winter (November to March) is cold, dark, and beautiful. Days are short (only four or five hours of light around the solstice), but this is when the Northern Lights are most visible and when Reykjavik feels most itself: cosy bars, geothermal pools steaming under snow, fewer tourists. Roads outside the capital can close at short notice, so plan flexibly.
The shoulder months (April–May and September–October) are an underrated compromise: longer days than winter, fewer crowds than summer, and the autumn aurora season starts in late September.
Worth timing a visit around: Iceland Airwaves (early November), the country's flagship music festival, with shows in venues all over downtown; Menningarnótt / Culture Night (late August), when the city throws open its doors with free events and concerts; and Þorrablót (mid-January to mid-February), a traditional midwinter feast featuring fermented shark and singed sheep's heads, mostly enjoyed for the experience.