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The predecessor of the Icelandic Club of Greater Seattle, Vestri, was established in Ballard, Washington on October 21st, 1900 by members of the Icelandic-American community in Ballard. Vestri was formed to promote learning and fellowship, retain the purity of the Icelandic language, and encourage greater knowledge of Icelandic literature. Activities during Vestri meetings included singing, reading poetry and stories as well as speeches concerning various local, national, and historical topics. Members also discussed social events and other administrative topics relating to the club and its activities.

By 1965 attendance at the club meetings was low enough to raise concern. Members of Vestri recognized the need to transform the club "to meet present day needs"—specifically to hold the meetings in English while carrying on the work of Vestri in the community. On March 16, 1965 the Icelandic Club of Greater Seattle was formally established, and in May 1966 Vestri was formally dissolved. Since 1965, the Icelandic Club of Greater Seattle has continued to promote Icelandic culture and language. It has sponsored the Scandinavian Music Festival, Iceland Independence Day celebrations, and Icelandic language courses. In 1982 the Club held a reception to honor the president of Iceland. In 1986 it was formally received into the Icelandic National League of North America, which is "a non-political, cultural organization that strives to contribute to North American culture through the preservation and promotion of the positive aspects of our Icelandic heritage... through the strengthening of cultural bonds and kinship ties with the people of Iceland and through the promotion of cooperation among Icelandic cultural groups here in North America."

In 1911 Vestri was complimented by a women's auxiliary called Eining, also based in Ballard, Washington. Eining was partly modeled on the Ladies Aid Society of Minneota. According to the club's constitution, the purpose of Eining was "to aid the ill and needy Icelandic people and families in Seattle and vicinity: not only members but non-members as well" as well as to "promote friendly associations in the Icelandic community in Seattle."