In earlier days, the people living in the Mżvatn area made their living mostly from agriculture and by trout fishing in lake Mżvatn. In recent years, however, this scenario has changed dramatically. A diatomite factory (Kķsilišjan) was put into use in the late sixties and was the largest employer in the area for over three decades. The diatomite factory is no longer in operation. There are also many jobs producing electricity at the geothermal power plants in Bjarnarflag and Krafla. The tourist industry has long been steady in Mżvatnssveit. There are a handful of hotels, restaurants, camping areas and other enterprises connected with traveling. There is considerable growth in tourism at this time with new ideas being explored constantly.
Plans are afoot for building terrestrial baths in Mżvatnssveit, upholding in a new way what has been a tradition in the region for as long as anyone can remember.
Mżvatn is the fourth largest lake in Iceland, covering 36.5 square kilometers, or approximately 14 square miles. It is situated at 277 meters (908 feet) above sea level, very indented and with more than 40 small islands. Mżvatn is shallow, with a maximum depth of only about 5 meters. The Mżvatn area is home to more species of ducks than any other place on earth, with a very diverse bird life in general. Mżvatns natural beauty is unparalleled. A large stream of travelers visit Mżvatn in the summer, but many believe the lake and its surroundings to be no less impressive in the wintertime. A few places around Mżvatn have a particular attraction for travelers, such as the strange formations of Dimmuborgir, the pseudo-craters around Skśtustašir, the hot springs east of Nįmaskarš, Höfši, Hverfjall, Leirhnjśkur/Krafla, Grjótagjį and others.
Laxį River, one of the most bountiful and sought after fishing rivers of the country, runs from Mżvatn. The stream Gręnilękur, from Lake Gręnavatn, is Mżvatns only source of surface water, the majority of Mżvatns water coming from underground sources
Mżvatn derives its name from the often annoying gnat, which is divided into two kinds, of which one has a habit of biting people. These two variations comprise a large number of species, however. The ecological picture would undoubtedly be vastly different if there were no gnats, as they provide a large part of the diet of various birds as well as trout.
Although Mżvatn is situated in Icelands remote highlands, the area has been well populated since soon after the start of human habitation in Iceland in the ninth century, the ampleness of food drawn from the lake doubtless a decisive factor.