Bifröst University is located in the valley of Norðurárdalur, approximately 30 kilometers north of Borgarnes, Iceland. Originally a business school, it also offers degrees in law and social sciences. As of 2007, the university has approximately 560 full-time resident students in its bachelor's, masters & preparatory programs, with 700 other non-resident students pursuing bachelor's and master's degrees. A village, also called Bifröst, has grown up around the university.

The university was founded in Reykjavík in 1918 as a secondary school called the Cooperative College (Samvinnuskólinn). The school was run by the Icelandic cooperative movement (Samband íslenskra samvinnufélaga) and was originally intended as a training college for the staff of cooperative stores and other members of the movement. The founder and first head of the school was Jónas Jónsson from Hrifla, an important and controversial politician who was for many years a member of Parliament for the Progressive Party. He had studied at Askov folk high school in Denmark and Ruskin College in Oxford and his ideas about education were innovative for the time.