Magnetotelluric measurements have revealed a crustal thickness of 8-10 km in the axial rift zone of NE Iceland and above the proposed hot spot in central east and north Iceland. The crust thickens with age and is 20-30 km thick in the older Tertiary areas to the east and west of the axial rift zone. It also thickens toward north with increasing distance from the hot spot. The crust is underlain by a diapiric updoming asthenosphere over large parts of the country. At the crust asthenosphere interface there is a partially molten basaltic layer a few kilometers thick. This layer partially decouples the crust from the anomalous mantle. Its low viscosity may explain the spatial and temporal instability of the rift axis and the high mobility of the crust during tectonically active periods. A major volcano-tectonic rifting episode started in the Krafla area in 1975 involving an 80-km-long segment off the plate boundary. Several meters of opening accompanied by subsidence was observed in the center of the axial fissure swarm and contraction and uplift occurred on the sides. The rifting occurred in several short events. Magma flowed horizontally from an upper crustal magma chamber and mixed with magma ascending directly from the semifluid layer at the base of the crust. Crustal accretion was mainly engineered by dike intrusions. Only a minor part of the magma transported reached the surface. During tectonically quiet epochs, ,plate-driving forces, caused by the upwelling asthenosphere, result in long-term stretching and accumulation of tensile stress in the thinnest part of the crust. The vertical and horizontal displacements during rifting episodes can be explained by elastic rebound, where fissure opening accompanied by magma flow causes the release of tension.