The Iceland Air Defence System was founded in 1987.
It operates four radar

Radar

Radar is an object-detection system which uses radio waves to determine the range, altitude, direction, or speed of objects. It can be used to detect aircraft, ships, spacecraft, guided missiles, motor vehicles, weather formations, and terrain. The radar dish or antenna transmits pulses of radio...

 complexes, a software and support facility as well as a command and report centre.
, it does not independently possess any offensive capabilities, as Iceland's only air defence weaponry is operated by the Coast Guard, but is primarily used to monitor air traffic and direct allied interceptors based out of country.

Between 2009-2011 it was a part of the Icelandic Defence Agency (Varnarmálastofnun Íslands), but is now under the Coast Guard.

According to the U.S. Department of State website (Office of Public Diplomacy, Iceland page, updated August 2008), the 2008 budget for the Government of Iceland is the first in the country's history to include funding for defense (US$8.2 million); the money is earmarked for support of cooperative defense activities, military exercises in Iceland, and maintenance of defense-related facilities. This funding is in addition to roughly US$12 million in new expenditures for the operation of the Iceland Air Defense System radar sites, which the United States handed over to Iceland on August 15, 2007. In the begin of 2010 Iceland Air Defense reported a force of 25 employes.