The Icelandic crust is a product of its unique tectonic setting, where the interaction of an ascending mantle plume and the mid-Atlantic Ridge has caused elevated mantle melting, which has accreted and cooled in the crust to form an oceanic plateau. Here, we investigate the strength, orientation and distribution of seismic anisotropy in the upper crust of the Northern Volcanic Zone using local earthquake shear wave splitting, with a view to understanding how the contemporary stress field may influence sub-wavelength structure and processes. This is achieved using a dataset comprising >50,000 earthquakes located in the top 10 km of the crust, recorded by up to 70 stations over a 9 year period. We find that anisotropy is largely confined to the top 3–4 km of the crust, with an average delay time of 0.10 ± 0.08 s and an average orientation of the fast axis of anisotropy of N15° ± 33°E, which closely matches the spreading direction of the Eurasian and North American plates (~N16°E). These results are consistent with the presence of rift-parallel cracks that gradually close with depth, the preferential opening of which is controlled by the regional stress field. Lateral variations in the strength of shear wave anisotropy reveal that regions with the highest concentrations of earthquakes have the highest SWA values (~10%), which reflects the presence of significant brittle deformation. Disruption of the orientation of the fast axis of anisotropy around Askja volcano can be related to local stress changes caused by underlying magmatic processes.