Flatey is one of the thousands of islands on the Breidafiord Bay and one of the largest.  It was the most densely populated one during the centuries and an official trading post during the Middle Ages. A monastery was founded there in 1172, which made Flatey the most important centre of culture and education of the country during its existence.  Even after the monastery was moved to Helgafell, just south of the present village Stykkisholmur on the Snaefellsnes peninsula, the cultural influence of Flatey did not diminish until the middle of the 19th century.  The church still standing in Flatey was built in 1926.  The inside of it is decorated by the artist Baltasar, a Spaniard holding Icelandic citizenship.

The hamlet, which developed on the island is mostly intact and the remaining houses have been renovated and are occupied by their owners and their families during summer  Nowadays the island is easily accessible by the car ferry Baldur, which makes regular stops there on its way across the bay between Stykkisholmur and Brjanslaekur.  Accommodations and a restaurant are available for visitors.