Cephalopods are very different from other molluscs. Most do not rely on shells or poison for protection but more often rely on strength, speed and intelligence for survival. In many regards they are the most highly evolved invertebrates. For example, they have a complex nervous system, complex eyes, and a brain. Octopuses are also known for being quite intelligent and by far the smartest of the invertebrates

The main groups of cephalopods are three: squids, octopuses and nautiluses. The nautiluses differ from the others as they live within a coiled shell all their life. They are not found around Iceland, only in the tropics.

The habits of squids and octopuses are different, although both are predators. Squids have 10 arms, are efficient, streamlined swimmers, and are pelagic. Octopuses have 8 arms, are not streamlined, and usually live on the bottom. They are evolved for hiding. Cephalopods are unique among larger animals because of their short lifespan. Most live only for 1 or 2 years and they never spawn more than once.

Fourteen cephalopod species have been identified in Icelandic waters and thereof 6 have been found in the northern fjords or the deep waters at their mouths. The only one that has been fished commercially inshore is the European flying squid (Todarodes sagittatus), which occasionally migrates into the larger fjords. Supposedly, it usually lives in deep waters south of Iceland but sometimes for unknown reasons migrates onto the shelf and almost around the country.

The boreoatlantic armhook squid (Gonatus fabricii) is more common in the north. Its main distribution is deep waters north of Iceland where it is considered an important food source for some animals, such as the bottlenose whale.

The giant squid (Architeuthis dux) is a true giant and can reach up to 18 m length and a weight of up to one ton. Only the colossal squid (Mesonychoteuthis hamiltoni), recently found of Antarctica, is larger. The giant squid is therefore the second largest invertebrate in the world. Very little is known about it because it usually resides in very deep waters and has not, until recently, been seen alive in its natural habitat. Almost everything that is known about the giant squid is therefore from stranded and dead or dying individuals. There have been several such strandings in Iceland and among the first sightings in the world were indeed in North Iceland. The first in Þingeyrarsandur (close to Blönduós) in 1639 and another in Arnarnesvík close to Hjalteyri in 1790.

Other species that have been found in the deep sea north of Eyjafjörður, these are warty bobtail squid (Rossia palpebrosa), deep sea octopus (Bathypoliphus arcticus) and cirrate octopus (Cirroteuthis muelleri), which is jelly like.