Three marine sediment cores from Isafjardardjup and its tributary fjords (water depths ~100 m) were analyzed for sedimentological parameters, foraminiferal assemblages, and light stable isotopes to obtain a detailed record of Holocene environmental variability. AMS¹⁴C dates and the depth of a tephra layer of known age constrain the age models. Glacial marine conditions prevailed until ~10,100 cal yr BP, when tide water glaciers stopped calving and depositing ice rafted debris. Other studies suggested a lowering of relative sea level (RSL) on the order of 40 m in response to glacial unloading and isostatic rebound in NW Iceland. A lowering in RSL would explain the warming and increased bottom current strength of a shallower water column that is evident in the relatively light δ¹⁸O_calcite values and the presence of strong bottom current indicating species, such as Cibicides lobatulus, Astronion gallowayi, and Elphidium albiumbilicatum f. clavata, in Skotufirdir (a tributary fjord). At the mouth of Isafjardardjup, the lower RSL would explain the increased mass accumulation rates, where shallow banks became subject to increased erosion. High insolation and the influx of the warmer, more saline water masses of the Irminger Current (IC), which replaced the colder, fresher water masses of the East Greenland Current, contributed to the warm signal of the early Holocene (~10,600/10,100--7000 cal yr BP). The warm signal was truncated at 8900 cal yr BP in Skotufirdir. Overturning of the water column occurred when surface waters cooled sufficiently during the long polar winter and became denser than the underlying water masses. Arctic bottom waters support an arctic fauna at the site despite the presence of warmer IC waters during the summer. Insolation became the more evident driver for climatic variability once glacial activity had ceased and no longer obscured the proxy record. The onset of Neoglaciation was noted ~2700 cal yr BP. Shifts in the isotopic composition of organic carbon and the carbon nitrogen ratio over the last 2000 years suggest that increased soil erosion was caused by deteriorating climate and not farming after the settlement of Iceland in AD871.