Hnifsdalur is a small village just 4 kilometers from Isafjordur. The valley is at the mouth of Skutulsfjordur fjord overlooking the Snowy Coast (Snaefjallastrond). The hallmark of Hnifsdalur is the mountain Bakkahyrna towering over the small village. The village bears the name of the edge of the mountain that seen from the sea has the shape of a knives edge.
Hnifsdalur is a part of the township of Isafjordur. The largest fish factory in the northern part of the Westfjords is located in Hnifsdalur as well as a few small companies. Stores and public services for Hnifsdalur are in Isafjordur.
Hnifsdalur offers one of the best hiking routes for novice hikers in this area. It is an enjoyable and relatively easy hike to the bottom of the valley. From there it is possible to hike over the mountain pass Heidarskard to Bolungarvik and over the mountain pass “Thieves” to Isafjordur.