To study how selected indicators of socioeconomic status and urban-rural residency associate with medication use in form of number of daily medications, polypharmacy, and medication use according to Anatomic Therapeutic Classification (ATC) system. Cross-sectional, population-based study among older community-dwelling Icelanders. Criteria for participation were: age ≥65 years, community-dwelling, and able to communicate verbally and to set up a time for a face-to-face interview. Information on medication use was obtained by interviews and by examining each person's medication record. Medications were categorised according to ATC system. A questionnaire and the physical and mental health summary scales of SF-36 Health Survey were used to assess potential influential factors associated with medication use. On average, participants (n=186) used 3.9 medications, and the prevalence of polypharmacy was 41%. No indicators of socioeconomic status had significant association to any aspects of medication use. Compared to urban residents, rural residents had more diagnosed diseases, were less likely to live alone, were less likely to report having adequate income, and had fewer years of education. Controlling for these differences, urban people were more likely to use medication from the B and C categories. Moreover, older urban men, with worse physical health, and greater number of diagnosed diseases used more medications from the B category. There are unexplained regional differences in medications use, from categories B and C, by older Icelanders. Further studies are needed on why urban residents used equal number of medications, or even more medications, compared to rural residents, despite better socioeconomic status and fewer diagnosed diseases.