jats:titleAbstract</jats:title>jats:pSeismicity was monitored beneath the Krafla central volcano, NE Iceland, between 2009 and 2012 during a period of volcanic quiescence, when most earthquakes occurred within the shallow geothermal field. The highest concentration of earthquakes is located close to the rock‐melt transition zone as the Iceland Deep Drilling Project‐1 (IDDP‐1) wellbore suggests and decays quickly at greater depths. We recorded multiple swarms of microearthquakes, which coincide often with periods of changes in geothermal field operations, and found that about one third of the total number of earthquakes are repeating events. The event size distribution, evaluated within the central caldera, indicates average crustal values with jats:italicb</jats:italic> = 0.79 ± 0.04. No significant spatial jats:italicb</jats:italic> value contrasts are resolved within the geothermal field nor in the vicinity of the drilled melt. Besides the seismicity analysis, focal mechanisms are calculated for 342 events. Most of these short‐period events have source radiation patterns consistent with double‐couple (DC) mechanisms. A few events are attributed to non‐shear‐faulting mechanisms with geothermal fluids likely playing an important role in their source processes. Diverse faulting styles are inferred from DC events, but normal faulting prevails in the central caldera. The best fitting compressional and tensional axes of DC mechanisms are interpreted in terms of the principal stress or deformation rate orientations across the plate boundary rift. Maximum compressive stress directions are near‐vertically aligned in different study volumes, as expected in an extensional tectonic setting. Beneath the natural geothermal fields, the least compressive stress axis is found to align with the regional spreading direction. In the main geothermal field both horizontal stresses appear to have similar magnitudes causing a diversity of focal mechanisms.</jats:p>