Strains PRI 2268 and PRI 3838T were isolated from two separate hot springs in the Torfajokull geothermal area of South Iceland. The cells were non-motile rods, approximately 0.3 μm in width and 1.5–2.5 μm in length. Electron microscopy revealed a Gram-negative cell-wall structure. The strains grew at 45–79 °C (optimum, 65 °C) and pH 5.5–10.5 (optimum, pH 6.0–7.0). 16S rRNA gene sequence analysis indicated that they formed a separate branch within the genus Thermus with ‘Thermus kawarayensis’ KW11 as their closest cultured relative (96.5 % similarity). The gene sequence similarities of both new isolates to Thermus aquaticus YT-1T and Thermus igniterrae RF-4T were 96.1 % and 95.5 %, respectively. DNA–DNA relatedness between strain PRI 3838T and ‘T. kawarayensis’ was 46.1 %. The DNA G+C content of strain PRI 3838T was 69.0 mol%. The predominant menaquinones, pigmentation, fatty acid profiles and phospholipid profiles of the novel strains were similar to those of other members of the genus Thermus. However, the new strains could be differentiated from the type strains of all other species of the genus Thermus by their lack of catalase activity and their utilization of only a few carbon sources. Furthermore, the novel strains exhibited mixotrophic growth with sulfur oxidation. On the basis of 16S rRNA gene sequence comparisons, DNA–DNA hybridization and physiological and biochemical characteristics, the new isolates represent a novel species. Since the species appears to be ubiquitous in Icelandic hot springs, the name Thermus islandicus sp. nov. is proposed. The type strain is PRI 3838T (=DSM 21543T=ATCC BAA-1677T).