The Laki Fires eruption occurred in 1783-84. A 25 km long eruptive fissure opened where the Laki crater row now stands. The second largest lava flow in Icelandic history ran from the craters at Laki.

From the western part of the crater row the lava flowed down the course of the river Skaftá and spread out over the low-lying area between the Kúðafljót river and the eastern branch of Skaftá. This lava flow is called Eldhraun. From the eastern part of the crater row the lava ran down the Hverfisfljót river and spread over the Brunasandur sand plain.

The catastrophe caused by the Laki Fires was the greatest to befall Iceland in recent centuries. Toxic ash spread over most of the country and a volcanic mist poisoned the air. This mist gave the disaster its name: Móðuharðindi, the hardship of the mist. From the start of the eruption it was obvious how it would end; a black eruption cloud bore down on the coastal plain, and ash fell so that inside the houses it was dark, and outside footprints marked the ground.

Toxic ash ruined pastures so livestock sickened and starved. The weather cooled due to the mist, and sea ice reached the coast. When winter arrived in 1783–1784 livestock collapsed from starvation and disease due to the toxic volcanic material. People died of hunger. During the hardship of the mist, one in five Icelanders (about ten thousand people) died, and around 75% of the farm animals were lost. In Fljótshverfi, Meðalland and Síða, about 40% of the population died, 20 farms ended under the lava and another 30 were badly damaged so that they had to be temporarily abandoned.

Sulphurous mist and fine ash from the Laki eruption drifted over the northern hemisphere and had considerable impact on the environment and climate. On June 24th 1783, the haze was at its densest all over Europe. By the beginning of July, it had spread to Russia, Siberia and China. At its peak, it covered about a quarter of the earth's surface, or all land north of the 30° latitudinal line. It has been argued that the French revolution began with the Laki Fires because of the enormous influence the mist had on the climate and farming in Europe.