The stereotype of Iceland is a land of ice and fire, constantly subject to the devasting power of nature, an image that evokes the idea of a radically inhospitable environment, where is almost impossible to survive. Nevertheless Iceland, since independence, has developed so quickly to rank nowadays in the first positions in the world in terms of GDP pro-capita and HDI. Under this development there is a peculiar relation man-nature, that have been influencing the settlement and the economy so far, and that is so deeply rooted in the history of this territory to become a cultural and identitary factor. The aim of this paper is to analyse the relation environment-development in Iceland and the role of the natural landscape in the cultural sphere and in the development policies of this country.