Lake Mývatn was created about 2300 years ago by a large fissure eruption pouring out basaltic lava. The lava flowed down the Laxárdalur Valley to the lowland plain of Aðaldalur where it entered the Arctic Ocean about 50 km away from Mývatn. The Crater Row that was formed on top of the eruptive fissure is called Þrengslaborgir (or Lúdentarborgir) and has often been used as a textbook example of this type of volcanic activity. There was a large lake in the area at the time, a precursor of the present-day Mývatn. When the glowing lava encountered the lake some of the water-logged lake sediment was trapped underneath it. The ensuing steam explosions tore the lava into small pieces which were thrown up into the air, together with some of the lake.
By repeated explosions in a number of locations, groups of craters built up and now dominate the landscape on the shore of Lake Mývatn and also form some of the islands in the lake. This type of lava formation is known as pseudocraters or rootless vents. A group of such craters at Skútustaðir on the south shore of the lake is protected as a natural monument and is frequented by tourists. Other pseudocrater groups in this lava field are in the Laxárdalur Valley and Aðaldalur. The formation of pseudocraters halted the advance of the lava in some places creating temporal lava lakes. The lava eventually drained from the lakes, leaving behind a forest of rock pillars. The biggest of these formations is named Dimmuborgir. At another place, Höfði, the pillars stand in the lake water. The lava created by the Þrengslaborgir eruption is known as the Younger Laxá Lava.