Iceland’s first law school opened its doors 1 October 1908. Until then, all law schooling had taken place in Denmark. The establishment of the School was the culmination of half a century of Icelanders campaining for the right to teach law in Iceland. The Law School operated for 3 years, during which it had 3 teachers and a total of 15 students, none of whom graduated. Instead the students and the Law School were incorporated into the University of Iceland's Faculty of Law when it was established in 1911. The Law School's teachers became professors at the new Faculty of Law and the first students graduated as lawyers in 1912. In 1941 the Faculty was changed to the Faculty of Law and Economics, which would later become the Faculty of Business Administration. In 1962 the Faculty of Law once again became an independent faculty.
The Faculty of Law was at first governed by the 1901 Universities Act and the 1912 regulation. The programme was taught as a whole with one examination session at the end, a professional certification in law. In 1936 the programme structure change significantly when the examinations were split in two. With regulatory changes in 1949 special admissions examinations were introduced in individual subjects, but otherwise the programme was split into a first part and second part. That structure remained relatively intact until 1970, when fundamental changes took place in the teaching and study structure of the Faculty of Law. Those changes exemplified a significant step towards making the law programme more diverse and modern, and in tact with societal shifts.
Until 1992, the Faculty's operations were primarily based on the 1970 review of the University regulations, despite the regulations being amended in 1975, 1979, 1981, and 1987. In 1992, foundational changes were implemented in the Faculty of Law, including regarding concentrations, section divisions of the programme, and again in 1999, in particular review of core subjects, the elimination of programme partitions, and the introduction of a credit system. In autumn 2002, further changes were introduced, now with the introduction of a BA degree in Law and graduate studies for professional certification, which is the equivalent of a Master's programme. Currently the University regulations no. 458/2000, with amendments, apply to the Faculty of Law.