Around the turn of the 18th century the episcopate seat Skalholt was moved to the capital and the whole country became one diocese. Before these changes took place it was considered necessary to build a cathedral in Reykjavik. In 1788 stones were heaped up on the building site during the winter to ensure sufficient building material for the summer. A group of handicraftsmen came from Denmark, but the proceedings were slow because of their drunkenness.

The roof of the church was so badly constructed, that it had to be rebuilt in 1792. In spite of these delays the church was completed and consecrated in 1796, exactly 10 years after the capital had received its municipal rights, and the church could seat most of its inhabitants. The building leaked and was so damp, that people kept away. It was discovered, that most of the wood used for the construction had been rotten from the beginning.

In 1815 the church was condemned by the municipal authorities and two years later it was thoroughly restored. On Whitsunday 1825 one of the roof beams squeaked so much, that the congregation was driven mad with fear and escaped through doors and windows. The baptismal font, made by the sculptor Bertel Thorvaldsen, was put up in the church in 1839 and the next year it acquired an organ. The church was reconstructed and enlarged in 1847-1848 and the sand for the masonry was imported from Denmark as if there were no sand to be found in Iceland.

The Danish architect L.A.Winstrup and Danish handicraftsmen were employed for this task and during the next few decades the church fell into disrepair because of lack of maintenance. This called for a thorough restoration in 1879 by an Icelandic carpenter, who left the church looking like it does today with seats for 600 people. The National Library, The National Museum and the National Archives were housed in the loft of the church until they were moved to the House of Parliament in 1881. The latest restoration took place in 1999. The architecture of the cathedral is neoclassic.