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Objective: To evaluate the prevalence of psychotropic drug use among home-dwelling elderly Icelanders in the year 2006., Materials and Methods: A population-based drug utilization study using the Icelandic Medicines Registry. The study group consisted of Icelanders, seventy years and older living at home (8% of total population). Prevalence of antidepressant, neuroleptic, anxiolytic and hypnotic use (ATC-groups N06A, N05A, N05B, N05C) was defined as the dispension per 100 individuals of one or more prescriptions for these drugs within the year 2006. For cross-national comparison we used data for 70-74 year olds in the Danish Registry of Medicinal Product Statistics., Results: One third of all dispensed prescriptions in Iceland in 2006 were for people aged 70 years and older, and one fourth were for psychotropics. Elderly women were more likely than men to use psychotropics (RR=1.40 95% CI: 1.37-1.43). The prevalence of psychotropic use was 65.5% for women and 46.8% for men. Anxiolytics and hypnotics (N05B or N05C) were the most frequently used psychotropics, with a prevalence of 58.5% for women and 40.3% for men. Antidepressants were used by 28.8 % of women and 18.4 % of men. Neuroleptics were used by 5%. By comparing 70-74 years old Icelanders and Danes, the Icelanders were 1.5 to 2.5 times more likely to receive any psychotropics drug in 2006., Conclusion: Use of psychotropics, especially anxiolytics and hypnotics, is common among elderly Icelanders. Comparing information for 70 to 74 year olds with Danes of same age, the prescribing of psychotropics is more frequent in Iceland.