As you're driving Krýsuvík you'll go past a beautiful green lake, called Grænavatn (literally, Green Lake). It's just a few kilometers south of Seltún, and right by the road, so it's a perfect stop to combine when visiting the geothermal area.  The lake is a volcanic crater that got its name from its unusual green color which is due to the high level of sulfur in the water and its depth. The lake is only about a few hundred meters in diameter and offers a perfect trail for a refreshing walk, as it only takes about 20 minutes to walk around the lake. Grænavatn is considered by geologists to be one of the most noteworthy geological phenomena of its kind in Iceland.

Due to its unusual nature and color, the lake has been a source of folklore stories throughout the centuries and only as recently as the middle of the 16th century, an odd creature was spotted coming from the lake.