The 1783-1784 Laki eruption was one of the most severe natural catastrophes to occur in Iceland in historical times (since 1140 years). Vegetation damage by sulphate aerosol and fluorine poisoning caused a massive decimation of livestock. The impact of fluorine poisoning and sulphate aerosol on human mortality is uncertain, but the loss of animals caused a famine which took many lives. The vulnerability of the Icelandic society to famine is discussed. 18th Century Iceland was a Danish dependency and, despite the abundance of fish in the surrounding waters, a subsistence farming community and thus highly dependent on livestock. On the other hand, the farming community possessed coping strategies which mitigated the impact of livestock loss. During the famine, the Danish government was in principle willing to provide relief. However, local authorities in Iceland were slow to ask for help, and did not dare to exploit the means at their disposal (e.g. the right to ban the export of Icelandic foodstuff) without consent from Copenhagen. The Danish officials in turn were unwilling to act decisively upon incomplete information. These two factors prevented timely measures. While 4.4 × 10^5kg of grain were provided for famine relief in summer 1784, the merchants exported 1.2 × 10^6kg of fish, which greatly aggravated the hunger in the second winter. The effects of this ‘natural’ catastrophe could therefore have been significantly reduced by efficient government.