Iceland's seasons are dramatically different from one another, and the right time to visit depends entirely on what you want to see.
Summer (June–August) is the peak season. Days are long — in June the sun barely sets, and in Reykjavik it stays light past midnight. Temperatures are mild (10–15°C in the south, cooler in the highlands), wildflowers bloom, puffins are nesting on cliffs, and the highland roads are open. Expect crowds at the main tourist sites, higher prices, and the near-impossibility of seeing the northern lights. Book accommodation and rental cars months in advance.
Autumn (September–October) is arguably the best time to visit. Tourist numbers thin out, prices drop, and the light turns golden. The northern lights become visible from late August. Nights are dark enough for aurora hunting but temperatures remain reasonable. The main Ring Road is still easily drivable; highland roads begin to close.
Winter (November–March) is cold, dark, and expensive to get to, but it has its own appeal. The northern lights are at their most visible from September to April, peaking in intensity during this solar maximum period. Days are very short — in December, Reykjavik gets only four to five hours of daylight. Some highland attractions are inaccessible, but winter activities like ice cave tours, glacier walks, and snowmobiling are available. Bring proper gear.
Spring (April–May) is quieter and cheaper than summer, with lengthening days and snow still on the mountains. Some highland roads may not yet be open. A decent shoulder-season option if you're flexible.
The southern coast and Reykjavik are accessible year-round. The Westfjords and the interior are essentially summer-only destinations.