Laugavegur is the primary shopping street of downtown Reykjavík, and one of the oldest shopping streets. The name means "wash road", as it used to lead to the hot springs in Laugardalur where in olden times the women of Reykjavík took their laundry for washing.

It is also home to many bars, nightclubs and restaurants. On Friday and Saturday nights, the street is often filled with people all night long. The Icelandic Phallological Museum is also located on this street.