A Holocene sediment record is presented from the Djupall trough, situated on the inner shelf northwest of Iceland. The paleoclimatic development has been interpreted on the basis of mass accumulation rate, carbonate content, mean grain size, sediment petrology and 29 radiocarbon dates. The results demonstrate in the early Holocene (10,000-8000 cal year BP) high sediment accumulation rates attributable to the effect of enhanced sediment mobilisation under influence of a relatively low sea level and remobilisation of glacial sediments on the sparsely vegetated Vestfirdir peninsula. The data suggest that a general southward displacement of the Polar Front commenced around 5000-4000 cal year BP. A new proxy for Holocene climatic variability is presented by the basalt/plagioclase ratio in the 63-100 mum fraction. High basalt/plagioclase values are primarily related to periods of increased storminess and bottom current energy, which enhanced the transport of basaltic sediment from the coastal zone towards the outer shelf. Advection of polar waters containing basalt-rich IRD from the eastern Greenland Blosseville Kyst basalt province may also have contributed to increased basalt/plagioclase ratios. The correlation between basalt/plagioclase ratios and proxies of solar activity (C-14 production and Be-10 flux) was explored and suggests that some of the centennial-scale peaks in colder climate could be related to increased nuclide production in the upper atmosphere. In addition, it was found that the Medieval Warm Period (c. 1100-700 cal year BP) was characterised by strong cyclone activity over the Iceland region. Intense atmospheric circulation during this period has been confirmed also by other studies in the northern North Atlantic region.