The official breeding goal of Icelandic horses is to produce a healthy, fertile, and durable riding horse, a robust and yet elegant and versatile horse with five excellent gaits. The conformation should offer optimal natural balance, and the movements should be supple, high and ground covering in all gaits, giving an elegant and powerful image.
SMALL BUT NOT A PONY
The size of Icelandic horses can vary considerably, from just about 130 cm on highest point of withers, to over 150 cm high. Average size of horses shown in breeding evaluation is just under 140 cm on withers which is considerably taller than 30 years ago. The reason for horses growing taller is due partly to better feed, but also selected breeding.
See here for detailed description of breeding goals, rules and regulations.