We present a comprehensive set of Sr, Nd, and O isotope data and trace element concentrations from tholeiitic and alkaline lavas of the neovolcanic zones of Iceland (picrites, olivine and quartz tholeiites, transitional and alkali basalts, differentiated rocks). Variations in the oxygen isotope results allow us to distinguish two groups. The first, which comprises quartz tholeiites and more differentiated rocks usually associated with central volcanoes, has low δ18O values (+5 to +1‰) resulting from interaction with the hydrothermally altered Icelandic crust. The second group, which contains picrites, olivine tholeiites, and alkali basalts, has normal mantle oxygen isotopic compositions (δ18O = +5 to +6‰) which are thought to represent those of the mantle source. Nd isotopic compositions vary greatly, from 143Nd/144Nd = 0.51314 in picrites to 0.51295 in alkali basalts. To produce such a variation for rocks with the chemical compositions of Icelandic volcanics (147Sm/144Nd = 0.12=0.28) requires >200 m.y., a period that greatly exceeds the maximum age of Icelandic crust. Previous models, in which the Sr isotopic variations were explained in terms of evolution of crustal reservoirs, are invalidated, and mantle reservoirs with different Nd and Sr isotopic compositions are indicated. The Iceland data define a linear array in the Sr‐Nd isotope diagram which overlaps both mid‐ocean ridge basalt and oceanic island basalt fields and indicates mixing between depleted and enriched end‐members. Alkali basalts come preferentially from an isotopically and chemically enriched component of the Iceland plume, and picrites come from a more refractory, more depleted portion. Positive Sr, Rb, and Ba anomalies are present in picrites and other lavas with low trace element contents. These anomalies are not correlated with isotopic differences but are nevertheless believed to result from interaction between the parent magmas of these rocks and altered Icelandic crust. This indicates that even the most primitive Icelandic lavas have been contaminated with some crustal material.