Originally the freedman Vifill built his farm to the northeast of Lake Vifilsstadavatn.  He was one of two slaves of Ingolfur Arnarsson, the first Norwegian settler in Iceland, who eventually found the two high seat pillars Ingolfur had thrown overboard upon sighting the land on his way here, and vowed to settle where they drifted ashore.  Both slaves were rewarded with their freedom for this accomplishment.  Mt Vifilsfell is also named after the former slave because he climbed the mountain every day to observe the weather conditions before deciding to go fishing on the bay.
On September 1^st 1910 a health care centre for tuberculosis patients was opened at Vifilsstadir.  Around and after the turn of the 20^th century the death rate of those people was the highest in Europe.  After the opening of several such centres all around the country the development resulted in the present situation, which shows the lowest death rate of these causes in the world.  After these remarkable results had been reached, the centre was abolished in 1973 and a hospital for patients suffering from all kinds of respiratory diseases was established instead.  A large milk producing cattle ranch was operated there as well until 1974.  In a separate building a rehabilitation centre for alcoholics was opened in 1976.