The Hengill region in SW Iceland is an unstable ridge-ridge-transform triple junction between an active and a waning segment of the mid-Atlantic spreading center and a transform that is transgressing southward. The triple junction contains active and extinct spreading segments and a widespread geothermal area. We evaluated shear-wave birefringence for locally recorded upper-crustal earthquakes using an array of 30 three-component digital seismographs. Fast-polarization directions, ϕ, are mostly NE to NNE, subparallel to the spreading axis and probably caused by fissures and microcracks related to spreading. However, there is significant variability in ϕ throughout the array. The lag from fast to slow S is not proportional to earthquake depth (ray length), being scattered at all depths. The average wave-speed difference between qS1 and qS2 in the upper 2--5 km of the crust is 2--5%. Our results suggest considerable heterogeneity or strong S scattering. ¿ American Geophysical Union 1996