This former manor, seat of chieftains and a parsonage, after the adoption of Christianity, had a church dedicated to Holy Mary, Andreas the apostle, the holy bishop Martin and St. Barbara. The present church was built and consecrated in 1843. It was removed in 1939 and rebuilt on concrete foundations, lengthened and some windows added. The altarpiece depicts the crucifixion (by Asmundur Sveinsson; pear tree). On the church door is an original riding shield. In 1090, the fame of the dynasty, named after the valley, started peaking. Teitur Isleifsson, the son of the first bishop of the country, is considered to be the forefather of this dynasty.

During his time, "the first?" school of the country was established at Haukadalur. Soon the dynasty grew and played a big role in the Icelandic history (see The Sagas). Gissur Thorvaldsson was one of them (see Sturlunga). Shortly before the turn of the 13th century, Haukadalur became the property of the southern see. The Icelandic Forestry Service has expanded its operation in the valley since the early 20th century.

The land of Haukadalur once stretched all the way up to the crater row Jarlhettur, when the desert Haukadalsheidi was fully vegetated, but has now become one of the greatest erosion problems of the country. After the year 1938 about 1350 hectares were fenced off for reforestation and the church was restored. The first trees, 1500 Norwegian firs, were planted there in 1943. In 1941 the monument of the Norwegian Kristian Kirk, the pioneer of reforesting the area, and in 1961 of the Norwegian ambassador Thorgeir Anderssen-Rysst (1945-1958) and the bust of Sigurdur Greipsson (1972), were unveiled there to commemorate the endeavour and project of reclaiming this part of the country. One of the hot springs in the valley, "Marteinshver", at the foot of the mound behind the former farm, was used for steam baths in the past.

According to the legend, one of the few remaining giants of the country after the acceptance of Christianity, Bergthor of Blafell, died. He had expressed his wish of being buried in the cemetery of Haukadalur, where he is said to be resting.