Albedo is a key variable in the response of glaciers to climate. In Iceland, large albedo variations in the ice caps may be caused by the deposition of volcanic ash (tephra). Sparse in situ field measurements are insufficient to characterize the spatial variation of albedo over the ice caps. Here we evaluate the latest MCD43 MODIS albedo product (collection 6) to monitor albedo over the Icelandic ice caps using albedo from ten automatic weather stations in Vatnajökull and Langjökull as ground truth. We examine the influence of the albedo variability within MODIS pixels by comparing the results with a collection of Landsat scenes. The results indicate a good ability of the MODIS product to characterize the seasonal and interannual albedo changes with correlation coefficients ranging from 0.47 to 0.90 (median 0.84) and a small bias ranging from -0.07 to 0.09. The root-mean square errors (RMSE) ranging from 0.08 and 0.21, is larger than that from previous studies, but we did not discard the retrievals flagged as bad quality to maximize the amount of observations given the frequent cloud obstruction in Iceland. We find a positive but non-significant relationship between the RMSE and the subpixel variability as indicated by the standard deviation of the Landsat albedo within the MODIS pixel (R=0.48). The summer albedo maps and time series computed from the MODIS product show that the albedo decreased significantly after the Eyjafjallajökull and Grímsvötn eruptions in 2010 and 2011 in all the main ice caps (except the northernmost Drangajökull), with albedo reduction up to 0.6 over large regions of the accumulation areas. Following this validation, these data will be assimilated in an energy and mass balance model of to better understand the relative influence of the volcanic and climate forcing to the ongoing mass losses of Icelandic ice caps.