The cornerstone of the local economy is agriculture and animal husbandry, while tourism is a growing sector. Kirkjubæjarklaustur is a centre of commerce, services and industry. The population is 470, as of December 1. 2015. The district spans a great variety of landscape and vegetation, with a natural environment of striking contrasts. Landscapes and vegetation in the district are quite varied, and the natural contrasts astounding. Kirkjubæjarklaustur enjoys a pleasant climate, with mild winters and warm, sunny summers. Kirkubæjarklaustur, often abbreviated to “Klaustur” is centrally located in the district. Roads radiate from Kirkjubæjarklaustur in many different directions. The Ring Road (No.1) runs through the district. The Laki road, just west of Kirkjubæjarklaustur, leads into the highlands.
Natural disasters such as volcanic eruptions and sudden floods from beneath the glacier have through the centuries shaped the nature and society of the region. In 1783, a huge lava flow streamed from Lakagígar in what became known as the “Laki eruption”. This is believed to have been one of the greatest lava flows in a single eruption in the history of the world. Kirkjubæjarklaustur has a long and interesting history. Irish hermits, “papar,” are believed to have lived at Kirkjubær before the Norse settlement of Iceland.