At one point in time, this small village was home to largest export harbor in Iceland. In the forties and fifties, the Herring frenzy dominated the Icelandic economy and Raufarhöfn was an important place in that economic chain. But after the herring disappeared the effect was devastating for the village. This is the reason for the old and interesting factory buildings. The village is the site of a modern monument called the "Arctic Henge" which is aligned to the heavens and is inspired by the mythical world of the Eddic poem Völuspá (Prophecy of the Seeress). As of 2019, it has 188 inhabitants. It was a major fish processing station during the large herring catches in the mid 20th century.