The area is close to Reykjanes lighthouse and is collectively named Gunnuhver after a female ghost that was laid there. She had caused great disturbance until a priest set a trap for her and she fell into the spring. This happened about 400 years ago.
The mud pools take form where steam from boiling geothermal reservoir water emanates and condenses and mixes with surface water. Accompanying gases such as carbon dioxide and hydrogen sulphide make the water acid. This causes alteration of the fresh lava rock to clay.
Steaming of the ground at Reykjanes increased markedly as a consequence of a pressure drawdown in the geothermal reservoir upon the start of production from the reservoir in 2006. Iceland´s largest mud pool at present prominent, highest up in the Gunnuhver group. It is 20 meters wide across a rim of mud, boiling vigorously.