Lake Myvatn was created about 2300 years ago by a large fissure eruption pouring out basaltic lava. The lava flowed down the Laxardalur Valley to the lowland plain of Adaldalur where it entered the Arctic Ocean about 50 km away from Myvatn. The Crater Row that was formed on top of the eruptive fissure is called Threngslaborgir (or Ludentarborgir) and has often been used as a textbook example of this type of volcanic activity. 

     All geological formations are quite recent, dating from the Ice Age and postglacial times. 

     There was a large lake in the area at the time, a precursor of the present-day Myvatn. 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 these  repeated explosions in a number of locations, groups of craters built up and now dominate the landscape on the shore of Lake Myvatn 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 Skutustadir 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 Laxardalur Valley and Adaldalur. 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 Threngslaborgir eruption is known as the Younger Laxa Lava.
     The Myvatn district lies on the western border of the volcanic zone which cuts across north-eastern Iceland from north to south and is an extension of the Mid-Atlantic Ridge. All geological formations are quite recent, dating from the Ice Age and postglacial times.
The bedrock of the moors west of Lake Myvatn is made up of interglacial lava flows. Most of the mountains in the vicinity of the lake were formed by eruptions under the ice sheet in the glacial periods of the Ice Age. Eruptions that melted their way up through the ice formed table mountains (Mounts Blafjall, Sellandafjall, Burfell, Gaesafjoll), those which didn't formed hyaloclastite ridges (Mounts Vindbelgjarfjall, Namafjall, Dalfjall, Hvannfell).
     At the close of the Ice Age, about 10,000 years ago, the Myvatn basin was covered by a glacier which pushed up huge end moraines which can still be seen at the north end of the lake. After the glacier started melting, a glacial lake was dammed up in the Myvatn depression until the glacier retreated from the present course of Laxá river.
     Postglacial volcanism in the Myvatn district may be divided into three cycles. The Ludent cycle commenced shortly after the close of the Ice Age. The explosion crater (tephra ring) Ludent dates from this cycle. Its eruption was followed by a number of small fissure eruptions.
     About 3800 years ago the shield volcano Ketildyngja was formed about 25 km south-east of Myvatn, and from it a huge lava flow, the Older Laxa-lava, spread over the southern part of the district, plunged down the Laxardalur valley and flowed almost to the sea. This lava dammed up the first Myvatn, which was about as large as the present lake.
     The second volcanic cycle, the Hverfjall cycle, began 2500 years ago with a gigantic but brief eruption, which formed the explosion crater (tephra ring ) Hverfjall (also named Hverfell). An eruption in Jardbadsholar followed, producing the lavafield between Reykjahlid and Vogar. Approximately 200 years later a vast lava flow, the Younger Laxa-lava, was erupted (see above). The lava dammed up the present Lake Myvatn and also the lakes Sandvatn, Graenavatn and Arnarvatn.
     The third volcanic cycle began with the Myvatnseldar eruptions in 1724-1729 which commenced with an explosion that formed the crater lake Viti (Hell). Later lava flowed from Leirhnjukur down to the north end of Lake Myvatn, destroying two farms.
     The Myvatnseldar eruptions are quite similar in character to the recent volcanic activity near Krafla in 1975-1984. The source of both is a central volcano lying between Krafla and Gaesafjoll. Inside the volcano resides a magma chamber from which molten magma periodically bursts into a swarm of fissures that cut through the volcano from north to south.
     The recent activity was characterized by periods of slow land rise, interspersed by shorter periods of rapid subsidence, underground magma bursts, rifting, earthquakes and eruptions (nine in all). This is an excellent example of the process of continental drift in Iceland. A central volcano and its associated fissure swarm is called a volcanic system. The Krafla volcanic system is one of several, such systems, which together form the volcanic zone of Iceland.
     A few rhyolite mountains border the Krafla central volcano (Mounts Hlidarfjall, Jorundur, Hrafntinnuhryggur).
Because of the volcanic origin, there are silica quarries in the lake.