Information about natural background levels (NBLs) of chemicals in source waters allows water utilities to identify trends in drinking water contamination. We estimate NBLs for chemicals in source waters for Icelandic water utilities at both national levels with all data pooled, and according to geological regime. NBLs were derived by collecting samples from 79 aquifers considered largely unimpacted by human activities. The aquifers were categorized into four geological settings that are representative of the geology of Iceland. NBLs were calculated as 90%iles of all aquifers in each setting and in all pooled. There was a statistical difference between the geological settings in 11 parameters of 37 tested. The 90%ile for nitrate for all aquifers pooled was 1.36 mg/l, indicating little anthropogenic influence on water used for public water supply in Iceland. The results were compared to the chemical status of 60 European aquifers, collected for the European Union's Sixth Framework Program Background Criteria for the Identification of Groundwater Thresholds project, revealing lower dissolved solids concentration for Icelandic groundwater than that from other parts of Europe. The explanation is likely due to high permeability of young geology settings and low population density in Iceland whereas there is a long history of agriculture and industry in most European countries.