Asbyrgi canyon lies in the north of Iceland, about 50 minute drive to the east from Húsavík on the Diamond Circle road. The horseshoe-shaped depression is part of the Vatnajökull National Park and measures approximately 3.5 km in length and over 1 km wide. For more than half of its length, the canyon is divided through the middle by a distinctive rock formation 25 meters high called Eyjan ("the Island"), from which a vast landscape is seen.

The canyon's steep sides are formed by cliffs up to 100 metres in height. Down in the canyon, visitors walk through a woodland of birch and willow. Between 1947 and 1977, a number of foreign tree species were introduced, including spruce, larch and pine. The small lake Botnstjörn is home to a variety of waterfowl species.

Asbyrgi was most likely formed by catastrophic glacial flooding of the river Jökulsá á Fjöllum after the last Ice Age, first 8-10,000 years ago, and then again some 3,000 years ago. The river has since changed its course and now runs about 2 km to the east. The legend explains the unusual shape of the canyon differently. Nicknamed Sleipnir's footprint, it is said that the canyon was formed when Odin's eight-legged horse, Sleipnir, touched one of its feet to the ground here.