The history of Bessastaðir has been closely associated with the history of Iceland since the times of the settlement in the 9th century AD. Archeological excavations have shown that the first inhabitants of Bessastaðir settled there before AD 1000, and ever since the site has been inhabited. In the 13th century the great writer Snorri Sturluson had one of his farms there. After Snorri's death, the king of Norway confiscated the property, and during the remainder of the middle ages it was used by top representatives of the foreign rulers of Iceland. In the 17th century Bessastaðir was the residence of the most powerful representative of the Danish monarch in Iceland.
The main building at Bessastaðir was built in 1761-1766. In 1805 the only secondary school in Iceland moved there. It was attended among others by the 'Fjölnismenn' and other students who later became leaders of the campaign for national independence. The school moved to Reykjavík in 1846. In 1867 the farm was purchased by the poet and statesman Grímur Thomsen, who lived there for almost two decades. Among later owners were editor and parlamentarian Skúli Thoroddsen, and his wife, Theodóra Thoroddsen, who was well known for her literary works. In 1940 Sigurður Jónasson bought Bessastaðir and donated it to the state in 1941 as a residence for the Regent and later the President of Iceland.