Mr Gunnlaugsson became prime minister in May 2013 following elections in April in which his centre-right Progressive Party and the conservative Independence Party of Bjarni Benediktsson both won 19 seats in the 63-seat parliament or Althing.
The two parties formed a coalition after the election, taking over power from the Social Democrats, who suffered the worst defeat of any ruling party since Iceland gained independence from Denmark in 1944.
An Oxford-educated former journalist, Mr Gunnlaugsson belongs to a new breed of politicians who emerged after Iceland's 2008 financial crisis, and his elevation to the premiership marks a generational shift in the Icelandic government. His predecessor, Johanna Sigurdardottir, was 70 at the time of the election, while Mr Gunnlaugsson, aged 38 when he took office, became one of the youngest serving heads of government in the world.
The Progressive-Independence centre-right coalition came to power five years after the spectacular banking collapse of 2008 plunged Iceland into crisis and brought down the Independence Party-led government of Geir Haarde.
Although Ms Sigurdardottir's Social Democrat government, which took over in 2009, had succeeded in stabilising the economy and returning Iceland to modest growth, many Icelanders continued to suffer the after-effects of the crisis. Real wages are still far below their pre-crisis levels, and household debt remains crippling.
Iceland applied to join the EU in 2009, in the immediate aftermath of the banking collapse, when bloc membership was seen by many as offering the country a way out of its economic woes. However, the subsequent economic turbulence in the rest of Europe led many Icelanders to question the benefits of EU membership.
Fishing is one of the island nation's biggest resources, and a majority of the population is opposed to the introduction of the EU's common policies on fishing.
Mr Gunnlaugsson is an EU sceptic who believes that Iceland has little to gain in joining the bloc. Even before being sworn in as prime minister, he said that the coalition would freeze the already stalled talks on Iceland's EU membership and would hold a referendum on the issue.
Sigmundur David Gunnlaugsson became the leader of the Progressive Party in January 2009 and was elected to the Althing in the 2009 parliamentary election.
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